The Advocate General of the EU Court of Justice has rejected the UK's challenge to its cap on bankers' bonuses.
Advocate General Niilo Jääskinen gave an opinion that the EU legislation limiting the ratio was valid.
The cap on the ratio is designed to reduce incentives for bankers to take excessive risks but critics say it will push up basic pay and banks' costs.
The UK government challenged the legislation asking the Court of Justice in Luxembourg to consider six arguments challenging both the scope and the legal basis for the new rules.
Advocate General Jääskinen said: "Fixing the ratio of variable remuneration to basic salaries does not equate to a 'cap on bankers bonuses', or fixing the level of pay, because there is no limit imposed on the basic salaries that the bonuses are pegged against."
Read more: BBC News - Blow to UK's bankers' bonus cap challenge
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