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Broad majority of EU FinMins back bankers' bonus cap


08:54, March 06, 2013

BRUSSELS, March 5 (Xinhua) -- A proposed legislation that would strictly limit bankers' bonuses has won broad support from European Union (EU) finance ministers, officials said here on Tuesday.

Michael Noonan, finance minister of Ireland which is holding the EU's rotating presidency, told reporters after a meeting of EU finance minister that there was a "broad majority" among EU finance ministers in favor of the legislation.

His remarks came after the European Parliament (EP) and negotiators of the European Council reached a deal last week, proposing to cap EU bankers' annual bonuses below their annual salaries in principle.

To curb excessive risk-taking, the salary-to-bonus ratio will be 1:1 but could be raised to a maximum of 1:2 with the approval of shareholders, according to the agreement.

However, Britain, home to the world's largest financial industries, opposes the new regulation citing potential damages to its competitiveness.

"Our concern is it may have a perverse effect, in other words, undermine responsibility rather than promote responsibility in the banking system," said British Chancellor of Exchequer George Osborne.

The proposals "will push salaries up, it will make it more difficult to claw back bankers' bonuses when things go wrong," he added, urging Ireland to conduct further negotiations with the EP to iron out an improved version.

But in a blow for London's hope, Noonan said "there is very little further we can do for them because we pushed the negotiations to quite a degree and we got the best possible compromise with the parliament."

"So there isn't any more room left really," Noonan added.

Michel Barnier, the EU commissioner in charge of the single market, said it was "crystal clear" that the cap will be imposed.

The political agreement must be approved by member states and the EP plenary, in which a vote is expected at the 15-18 April session. Once approved, member states would need to include the rules in their national laws by January 1, 2014.

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