bankers-bonusesBankers are not the most popular of sorts these days. Ever since the global economy was plunged into turmoil in 2007, members of the financial class have not exactly been on most people’s Christmas card lists.

Eager to be seen to be “fixing” the financial sector, however, the European Union has been busy putting together a whole package of new laws and regulations that it hopes will restore confidence in banks. One of the most high-profile of these new rules will come into force next year, when Europe’s bankers are set to face an EU-wide ban on bonuses equal to more than 100% of their base salaries (or 200% with the approval of shareholders). Yet some critics are arguing that the new rules will be too weak and that banks will exploit loopholes, including raising base salaries, handing out share awards or boosting executive allowances.

We recently spoke to Michel Barnier, a French  Centre-Right politician and the current EU Commissioner for the Internal Market. Mr Barnier has been responsible for many of the new rules proposed by the European Commission, and we asked him to respond to some of your questions and comments.

We started with a suggestion from Jakub who thinks the cap on bonuses is too weak and that the EU should “raise reserve requirements and cap not only bonuses, but salaries too [and] tax dividends, so they cannot easily overcome the cap.” How would Barnier respond?

We also had a comment from Hamza, who is worried about the bonus cap for different reasons:

Be careful about the unintended consequences of capping bonuses. They might just increase their base salaries which would make them even more vulnerable in downturns (because otherwise they would just cut bonuses) and, by the way, they might move elsewhere – to Wall Street or Hong Kong.

How would Barnier respond?

Finally, we had a comment sent in from Jack, who said he wanted to see:

An end to excessive rewards, an end to rewards for failure, the splitting up of casino banking from ordinary banking, tighter regulation, a banking union that includes London and an ECB as the lender of last resort.

How would Barnier respond to Jack?

Will the EU’s cap on bankers’ bonuses be too weak? Or will it have the unintended consequence of causing Europe’s financial sector to emigrate to Wall Street or Hong Kong? And is it fair for Brussels to set down rules affecting the financial sector in London? Let us know your thoughts and comments in the form below, and we’ll take them to policy-makers and experts for their reactions.

Vote 2014

Voting is closed in our Debating Europe Vote 2014! The results are now in, so come and see what our readers thought!

IMAGE CREDITS: CC / Flickr – Stuart Crawford


34 comments Post a commentcomment

What do YOU think?

  1. avatar
    Algy Keuneman

    No they will all come to London and get paid a lot what ever they do with no blame at all

  2. avatar
    Alex Kassios

    Bonuses?
    They should all be fired and in jail, and have all their wealth returned to the state!

    • avatar
      catherine benning

      @Alex Kassios:

      You have written what I feel should have been the first reaction to this question by all of us. Why would they be left to enjoy their continued fraud of the people and additional be paid hugely for doing so? The only reason for that allowance must be collaboration. Politicians must have collaborated in the deception and made themselves a fortune doing so otherwise they would be as angry as we are at the losses they suffered because of it.

      This means, as many suggest below this post, a general and thorough clear out of those who witnessed and colluded in this downfall of the European people is paramount and must start with Cat Ashton. She was openly in cahoots with the criminal overthrow of an elected government in the Ukraine, as was confirmed by the phone call from her investigator Paet.

      As another visitor to this site put up in another thread, it was indeed instigated by the US administration, because of their psychotic fear of being ousted by the EU should they grow closer to Russia, thereby bringing the US into financial ruin.

      http://www.veteransnewsnow.com/2014/03/30/us-war-plan-for-europe-and-russia/

      We need a clean sweep with a following resurgence of European unity.

  3. avatar
    Christos Mouzeviris

    Cap them.. They caused the mess that others paid for, notably the poorer households of the periphery economies of Europe.. The least they can do to clear their name and increase their credibility among ordinary citizens is to take a cut themselves and not take a bonus for sometime in the future!!

  4. avatar
    Karel Van Isacker

    A cap on public servants’ salaries such as the ones received by EC/EU/EP officials would already be a good beginning as well. Be serious, earning 20.000 and more euros per month in salary and all kinds of benefits is a bit sick if that is also paid for by the taxpayers. So before looking at the banks, also clean the internal kitchen.

    • avatar
      Tarquin Farquhar

      @Karel Van Isacker
      Well said!

    • avatar
      zix

      I higly agree.

  5. avatar
    Lino Galveias

    if they tax workers’ crap wages then they should do it to bankers and politicians. They’re people too.

  6. avatar
    Antonio Jose Pecurto Pecurto

    UE this clime of fragility at state with program adjustment like to jostle at class to weigh at inside tunnel abashment UE obligation at the banks, also clean the internal Kitchen

  7. avatar
    Rui Manuel Simões Oliveira

    In my opinion, the bonuses in the bank system shoud have more fiscalization and transparency. We have to stop, with hard laws, this kind of offshore banking.

  8. avatar
    ironworker

    Should the European Union cap bankers’ bonuses ?

    Whooa…Sounds good, but sorry, I don’t buy it. Bankers got exactly what it takes to buy almost anything. High rank euro politicians, political majorities, governments, lobby, and even armies if that is necessary. Otherwise, sure, go ahead and try.

  9. avatar
    Daniel Pintilie

    No, UK should stay out of EU business as they are clearly not interested in such an union.

  10. avatar
    Christian Weale

    Yes, I can see there are far more advantages to a banking union, than not!!!!

    My concerns relating to Banking in London are huge bonus’s even when a bank is failing!
    Bankers should take some of the hardships too!

  11. avatar
    Kristian Ksenofonov

    Ofcourse should they are in European Union too.

  12. avatar
    Christian Weale

    Daniel, UKIP don’t represent the whole of the UK, they are the only group that want out of the EU, the Conservatives want in, but are committed to a referendum, the other Political Parties are committed to EU membership!
    In the European Elections, it is estimated that UKIP might take between 19 and 30% of the vote, depending on what section of the population are asked, however it looks as though it might be only a 37% turnout. In the National Elections in 2014, it is estimated that between 5.4 and 5.9% will vote UKIP with an estimated 49 / 54% turnout!
    This is not a great endorsement for what is a reactionary group!

  13. avatar
    Kavan Nash

    London already has the global repuation (despite the crash) that should not be controlled by europe.

    • avatar
      Limbidis Arian

      Yes but London is full of rich assholes who – of course – don’t want to be regulated and brits who are so brainwashed by their rabid anti-EU media it’s a wonder they can even think straight anymore.
      I have spent 3 months there visiting my aunt and i was horrified at the fabrications of their so-called ‘stories” about the EU.

  14. avatar
    Joe Grixti Tat-Topu

    Do not say what Europe can do for you,say what you can do for Europe,in or out.

    • avatar
      Paul X

      “Do not say what Europe can do for you,say what you can do for Europe,in or out”

      That’s easy……I give it some of my heard earned taxes

      Personally I’d much prefer someone to say what Europe is doing for me….

    • avatar
      Tarquin Farquhar

      @Joe Grixti Tat-Topu
      ALL Europe does for me is pick my pockets, insult me and force me to be a member of an expansionist imperialist regime.

  15. avatar
    eusebio manuel vestias pecurto

    UE os Bônus no sistema de banco deviam ter mais fiscalização e transparência Nós temos que parar com leis duras esse tipo de operações Bancarias offshore

  16. avatar
    he

    OF COURSE those bankers responsible for corruption should be capped – KNEE-CAPPED!

    The same also applies to the exorbitantly paid, excessively lazy EU eurocrats!

  17. avatar
    crayven

    Why cap them?
    This is like addressing the symptoms and not the problem. These people play by the rules of a system that tells them: If you want to succeed in this business, walk on corpses! WALK ON CORPSES! Be ruthless!

    So they are.
    The problem is the SYSTEM not the players. It always has been.

  18. avatar
    alvarobueno

    Bankers should not exist. Their existence is inmoral and even isn’t capitalist, they are mafia using our money to sale it again to us with interests. It is a rotten system.

  19. avatar
    George Yiannitsiotis

    Should the European Union cap bankers’ bonuses?
    Wrong question! The right one (in my opinion):

    Should the EU have rescued the private EU banks in the eurozone 4 years ago using tax-payers money or not?

    The answer, regarding the suffering of at first, the peoples at the periphery (the so-called PIIGS), is absolutely NO! There is no legitimate ground either in the “EU legislation” or in “national legislation” for the tax-payers rescuing private companies. Of course this is not a problem for the puppets of the West European Usurers Corporation in Brussels and Frankfurt….They simply don’t bother about DEMOCRATIC LEGITIMACY; the only matter that counts for them is MONEY. Fairwell dear CREDIT CARDS! I prefer to remain a HUMAN BEING, having nothing in common with you!
    (message clear for all EU bureaucrats, I hope)

  20. avatar
    nando

    Every measure will have its counter measure. Bonuses will get paid out in some Offshore (that the governments will have no control over) and all capping will go to naught. There has to be a better way. And this is not it!
    We need to look at the basics:
    – If our MBA schools continue teaching “profits above all else” we will continue having short term profits.
    – If we continue rewarding short term profits then we will continue having outrageous bonuses.
    And the beat goes on… as Bono and Sonny once wrote…
    If we continue having short term legislation we will continue having long term problems.

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