Banker Bonuses Always Send a Powerful Message
The ECB is right to rein in Deutsche Bank’s 2020 rewards, but Wall Street and London will try to exploit any sign of curbs on top-level European pay.
Maybe not the right moment, but ...
Photographer: Justin Sullivan/Getty Images North AmericaThe message the European Central Bank has sent by objecting to Deutsche Bank AG's proposed bonus pool is unmistakable in the midst of a pandemic, but the banking regulator needs to be careful about unintended consequences.
The European Union is on a concerted post-Brexit drive to lure highly-paid bankers to the continent from the City of London, as my colleague Elisa Martinuzzi has written. Regardless of the merits of Deutsche’s original plan to pay out more than 2 billion euros ($2.4 billion) for staff performance in 2020 — now scaled back because of the ECB’s reservations — bankers and traders do pay close attention to these things. Their expected levels of pay will help determine whether they up sticks for Paris, Frankfurt, Amsterdam or wherever.