European finance ministers back demand for a cap on bankers' bonuses - by Sam Flemming
European finance officials have backed France's call for a cap on bank bonuses, leaving Britain increasingly isolated over the issue. France yesterday led calls for limits on the size of pay windfalls in a radical attack on the lavish payouts at investment banks. And Anders Borg the finance minister of Sweden, which holds the rotating European Union presidency, demanded an outright end to the bonus culture.‘France is trying to lead the debate in the G20, and we will have to see what the outcome is, but I wouldn’t expect anything radical. ‘I don’t think you will get anything out of the G20 on caps on salaries or bonuses. That one isn’t going to run.‘I don’t think the Americans will go for it, and we have to get agreement (on bonuses) in the major financial centres otherwise you will get into pay arbitrage.’ The latter refers to banks shifting staff to jurisdictions where there are looser rules on bonuses. This is a major fear in Britain, which accounts for over a third of Europe’s wholesale financial sector.
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