BRUSSELS (Reuters) – Britain should welcome a cap on bankers’ bonuses agreed by European Union lawmakers on Thursday as a fair response to taxpayers’ anger over the huge cost of rescuing imprudent banks, Europe’s top financial regulator said.
EU Internal Market Commissioner Michel Barnier said he did not believe the curbs would drive banks out of the City of London, Europe’s biggest financial centre, to less regulated markets outside the European Union such as Switzerland or Singapore.
“I don’t think it is likely that banks that have an interest in working today and tomorrow in the single market will take the risk of leaving the single market simply because of this reason of the remuneration of their executives,” he said at a Reuters Summit on the future of the euro zone.
He was speaking hours after EU lawmakers, country representatives and the executive European Commission struck a provisional deal on new banking regulation including higher capital requirements and increased transparency by banks.
A ceiling on bonuses, the only one of its kind globally, is perhaps the most radical aspect of the new rules, and runs the risk of establishing an uneven global playing field that could put European banks at a disadvantage in attracting staff.