Brussels, 21/03/2014 (Agence Europe) - EU Internal Market Commissioner Michel Barnier said on Thursday 20 March that he reserves the right to take action if the new CRD IV rules capping bank bonuses are not respected.
Barnier said he would be paying extra attention to attempts to get round the rules, talking about new types of fixed pay which might be used for part of bonus payments. He said he had written to national bank supervision bodies asking about new bank remuneration practices and in the light of the answers, the EBA and European Commission would do their work to ensure the spirit and the letter of the law was respected.
This year, a cap on variable pay for bank and investment company staff was introduced for the first time in the European Union (see EUROPE 10812). Bonuses must be below annual fixed pay (a 1: 1 ratio), but if the majority of shareholders give the go-ahead, then it can be double fixed pay (a 2: 1 ratio). The rules apply to all EU banks, their subsidiaries outside the EU and non-EU banks' subsidiaries in the EU.
Earlier this month, the European Commission unveiled an implementation measure for the CRD IV legislation laying down qualitative and quantitative rules for identifying people whose work has an impact on a financial company's risk profile and who will therefore be subject to the European bonus cap (see EUROPE 11031). (MB)