Britain and the City look set to be the losers in the battle against the European parliament’s plans to bring in the toughest restrictions on bankers’ bonuses since the financial crisis began in 2008.
The UK appears to be leading a minority of just three countries that oppose the imposition of a new rule which would limit bonuses to no more than 100% of salary, or 200% if approved by a super-majority of shareholders.
Britain has been arguing that such tight limits would see basic cash salaries rise and weaken the power of bonus clawbacks, which banks have started to introduce in the wake of scandals such as mis-selling and Libor rigging.
But France strongly supports the strict limit regime and Germany has moved towards accepting it as a compromise, to ensure that the wider banking reforms make their way through the European parliament.
Ireland, which holds the revolving EU presidency, is expected to press the UK to agree to terms which could be put to the parliament tomorrow.
