FT: City bonuses set challenge for Juncker’s banking nominee

08 September 2014

European parliament lawmakers are threatening to veto the candidate for the EU’s next financial services chief unless the nominee promises to stop banks circumventing the bloc’s strict cap on bonuses.

The warning over the City of London’s use of “role based allowances” lays down a political marker as Jean-Claude Juncker, the European Commission president elect, prepares to unveil his nominee to oversee the banking sector.

Banks including HSBC, Goldman Sachs and Barclays have introduced allowances as a way to work around the bonus limits, which come into force next year and restrict variable remuneration to no more than twice fixed pay.

Gianni Pittella, leader of the parliament’s socialist group, told the Financial Times the allowances were a “provocation” and said he would not accept “any backward step” on the bonus curb, which was conceived and driven through by MEPs over the objections of Britain.

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