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Local Euro MP Sharon Bowles offers solution to question of bankers' bonuses

December 3, 2009 11:33 AM

As the RBS row on bankers' bonuses rages on, Lib Dem MEP Sharon Bowles, Chair of the European Parliament's powerful Economic and Monetary Affairs Committee, has proposed a solution to the question of bankers' bonuses.

Sharon Bowles told Members of the European Parliament: "We have to end the current situation in which bankers are making massive bonuses on the basis of low interest rates rather than high skill. Many British banks are now state-owned and it is the taxpayer that is footing the bill for this."

"Instead of rewarding bankers for easy profits based on cheap lending, they should instead be rewarded for real achievements.

"That means bonuses should be linked to the cost of capital. Bonuses should not be more than half of what it would have cost to raise the money by other means."

Bankers' bonuses are being debated as part of the review of the Capital Requirements Directive and will be voted on in the European Parliament next year.

Sharon Bowles said: "As Chair of the Economic and Monetary Affairs Committee, it is my job to find effective solutions that will work in the real world."