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2/19/13

As Europe Moves to Cap Bonuses, Britain Hesitates - by Harvey Morris

It is hard to imagine any European politician losing votes these days by promising to curb bankers’ pay, which may explain why members of the European Parliament are enthusiastically pushing for the toughest restrictions on bank bonuses since the 2008 financial crisis.

Representatives of the Parliament and of the 27 European Union governments were meeting on Tuesday to finalize a deal on banking law that would include pegging bankers’ bonuses at no more than their annual salaries.

The Parliament’s demands for a bonus cap reflect public outrage at continued revelations of huge payouts to bankers. But a side effect has been to hold up enactment of global banking regulations designed to strengthen the capacity of banks to withstand a future crisis.

A majority of member states have come around to supporting the bonus cap. Germany, a late convert to the idea, is prepared to compromise on the issue in order to ensure the wider banking changes are adopted by the elected European Parliament.

The debate has left the British government out on a limb, as it fights a possibly doomed rearguard action to protect the interests of the City of London, Europe’s biggest financial center.

Read more: As Europe Moves to Cap Bonuses, Britain Hesitates - NYTimes.com

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