Monday, March 4, 2013

European Parliament Seeks Cap on Bankers' Bonuses, Faces Stiff Push-Back From Britain, Europe's Banking Capital

The Euro-bureaucrats want to limit bonuses to bankers, also known as capitalists, who are the enemies of the continent's idiotic state-socialists. How perfect.

At Der Spiegel, "World from Berlin: 'Cap On Banker Bonuses Is a Serious Blunder'":
The European Parliament moved this week to cap banker bonuses. But the plan faces stiff resistance in Britain, Europe's financial capital, and even German commentators question whether it will stop banking excesses.

As of Jan. 1, 2014, bankers' bonuses will be capped at 100 percent of their annual pay, or 200 percent with shareholder approval. The decision, reached in Brussels early Thursday morning by the European Parliament, the European Commission and the rotating Irish EU presidency, is likely to be approved next week. The regulation will apply to all bankers working within the EU, as well as employees of European bank subsidiaries abroad.

Although the regulation may not have a huge impact on normal banking executives, it could have a radical one on investment bankers, who work in a sector where it isn't unusual for bonuses to reach as high as ten times their annual salary. The center-left member of parliament leading the negotiations in Brussels, Udo Bullmann of Germany's Social Democrats, described the move as being no less than a "revolution" on the financial markets.

But in London, Europe's banking capital, criticism of the decision has been massive. "This is possibly the most deluded measure to come from Europe since Diocletian tried to fix the price of groceries across the Roman Empire," scoffed conservative London Mayor Boris Johnson, adding that Brussels cannot set pay for an entire sector "around the world." The move would only boost the United States and Asia as financial industry centers and further alienate Britain from the EU, he said.

So far, British Prime Minister David Cameron has been reserved in his remarks about the bonus cap, although he shares fears that the new rules will scare banks away from Britain. "We do have in the UK -- and not every other European country has this -- we have major international banks that are based in the UK but have branches and activities all over the world," he said. Cameron called for a regulation in Brussels that is "flexible enough to allow those banks to continue competing."
The left seeks to bring the rest of the world down, damn the consequences. At least some common sense is prevailing in London, and that's despite Britain's long slide in the socialist mediocrity itself. (The NHS scandal continues to amaze the world with the wonders of socialized medicine.)

More at the link.