Barnier warns on further bonus reforms
Tuesday 31 January 2012 - by Andrew Hickley
Stepping up his attack on the bonus culture, Barnier said that the European Commission "will not hesitate" to enact stricter legislation if banks continue to pay excessive bonuses.
The measure, which was mooted in a green paper released in April 2011, could apply to all listed companies in the EU, he added.
Europe has introduced a series of requirements in an effort to clamp down on the bonus culture, which has been blamed for rewarding excessive risk-taking in the build-up to the financial crisis.
Banks in the EU are now forced to cap the proportion of their bonuses that are paid out in cash and stocks, while pay is usually deferred over a five-year period.
Additionally, bonuses that could damage a bank's funding base can be banned by regulators, while the European Banking Authority has warned banks that are unable to meet temporary capital requirements that they are expected to retain profits instead of rewarding employees.
But Barnier noted that despite calls for banks to exercise "the utmost restraint" when issuing bonuses, "the situation is still far from satisfactory".
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