EU banker bonuses held in check by Parliament

The blight of worldwide economic crisis has prompted European Parliament to vote in favor of capping EU banker bonuses, 625-28. In addition, extensive pension payouts were affected by the Parliament decision. The Associated Press reports that any short-term cash bonuses from next year can be limited. Now it is time for the rest of the world to follow suit.

Article resource: EU banker bonuses capped by European Parliament by Personal Money Store

EU bank rule will permit only partial bonuses in advance cash

From 2011 onward, EU banker bonuses will be limited to up to 30 percent of the annual bonus via advance loan cash. The 70-percent remainder will be held back and distributed only if the company performs at a high level for the year. The idea behind this is to hold a sufficiently large carrot before EU bankers, where bonuses will inspire instead of simply be expected. As Michel Barnier of the EU Financial Services Commission told the AP, "There will be no return to business as usual".

Giant early withdrawals can be capped at 20 percent

Banks where executives receive extra-large bonuses should expect to be able to take a maximum of 20 percent early. European Parliament has neglected to numerate what constitutes a "large" bonus so far. All 27 European member countries will adopt the new cap on EU banker bonuses. For nations like Great Britain, France and Germany, however, the rules will not seem out of place – they've had banker bonus caps for a while.

Banks must hold a minimum capital amount

European Union banking establishments may also be required to maintain a enough level of capital on hand to insure against risky investment products. 3 to four times more capital could be required than normal, writes the AP. However, banks bound by the new rules are concerned that they'll end up having to set aside even more emergency cash and will lose out when it comes to profit. The likely public response would be the banks brought this on themselves, and it's time to pay.

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usatoday.com/money/world/2010-07-07-eu-bank-bonuses_N.htm