The ECON VP, who was responsible for the 2010 rules on bankers bonuses, said the new rules would put an end to an 'unsustainable banking model'.
Labour Euro MP, Arlene McCarthy, Vice President of the Economic and Monetary affairs Committee and Labour’s Economic affairs spokesperson in the European Parliament who was responsible for the 2010 rules on bankers bonuses said:
“I welcome the deal reached last night to toughen up bonuses rules. In 2010, the EU put in place rules ensuring bonuses were deferred, could be clawed back and that cash bonuses were limited. The banks were told then to introduce a ratio between fixed salary and bonus elements.
“The failure of banks to self regulate on bonuses or to exercise restraint has now resulted in a bonus cap with a 1:1 salary to bonus ratio which aims to put an end to the excessive risk culture which lead to taxpayer bail-outs and bank collapses.
“These rules are designed to make banks safer, more accountable and ensure they focus on lending to the real economy. It will put an end an unsustainable banking model where bail-out banks with £5.2 billion losses, £1.1 billion fines for mis-selling, £390 million fines for Libor-fixing, were still in 2012 paying over £600 million in bonuses. This is neither ethical nor sustainable. The industry has had two years to sort this out and their failure to tackle the culture has resulted in these tough rules.
“It’s a shame that the UK government has sought to defend this broken bonus culture by acting as the trade union for a minority of highly-paid traders. The Coalition government says they want reform of the banking sector yet they are the only Member State to defend the status quo by maintaining the current flawed bonus culture.”
Press release
© Arlene McCarthy
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