Brussels, 31/01/2012 (Agence Europe) - EU Internal Market Commissioner Michel Barnier has warned the financial world that if it continues to pay out over-generous bonuses while everyone else is tightening their belts, or if there is significant bending of the rules, then the European Commission will tighten up existing legislation. He was speaking on Monday 30 January, at a European Parliament hearing on application of the Capital Requirements Directive - CRD III.
Barnier said there were several options open to the Commission - setting a binding, upper limit on bonuses as a proportion of total pay; setting limits on the highest pay in a bank, compared with the lowest in the same bank; and giving shareholders the power to vote on bank manager remuneration at AGMs. The latter option could be extended to all companies quoted on the stock exchange.
Barnier said it was totally unacceptable for banks to continue to pay over-generous bonuses to their staff because the financial industry has been bailed out by the taxpayer and ordinary people are being required to tighten their belts by several notches. He said the Commission would be keeping a very close eye on bank bonus payments in 2011.
CRD III came into force on 1 January 2011, introducing binding rules on bank pay policy, governance and structure and publication of bonus payments. It bans pay policies that clash with the aim of healthy capitalisation of banks. Any banks bailed out by the state must restrict bonus payments for staff. National bank supervisors have the power to put upper limits on bonuses and the draft CRD IV introduces extra transparency requirements whereby banks must publish the names of anyone receiving more than €1 million remuneration a year. (MB/transl.fl)