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'EU's tough new rules on bankers' bonuses are right' - Sharon Bowles MEP

December 10, 2010 2:00 PM

Sharon Bowles, who chairs the European Parliament's Economic and Monetary Affairs Committee, has reiterated her support for tough new rules on bankers' bonuses.

Voted through by the European Parliament in July, the new rules will be formally agreed today by the Committee of European Banking Supervisors (CEBS) - an independent body set up in 2009 to advise the European Commission on matters of banking supervision.

The new rules, which come into effect on 1st January 2011, will mean that senior bankers will have to defer at least half their bonus for a minimum of three years, while the cash element will be limited to 30% of the total and 20% for 'particularly large' bonuses.

Sharon Bowles MEP, said:

"The new rules will put an end to the bonus culture as we know it. Bankers will no longer be able to walk off with enormous up-front cash bonuses or bonuses dressed up as pension benefits.

"There has been a lot of talk this week of banks, such as HSBC and Standard Chartered, moving their operations to Geneva or Singapore where the rules still permit huge up-front payouts, but to those that would go I say good riddance.

"Top wealth-generators deserve some degree of recognition but to carry on with a system where even those who do not create wealth are given, and expect, large amounts of cash every year by way of a bonus, in addition to their competitive salaries, it is not a system the European Parliament is willing to support.

"The European Parliament is sometimes criticised for taking its time but on the issue of bankers' bonuses, we have taken the initiative. The European Parliament's tough new rules on bankers' bonuses are right."