Shooting an albatross

7 Oct 2010 By George Hay Follow @gfhay

EU regulators appear poised to endorse tough caps on bank pay and strict limits on upfront cash bonuses. The desire to rein in compensation is understandable. But hard rules could have unintended consequences. And diverging from the U.S. approach could hobble Europe s banks.

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European regulators are set to endorse tough new proposals to rein in bankers' bonuses suggested by the European Union in June.

The Committee of European Banking Supervisors (CEBS), which includes all 27 EU states, met in London on Oct. 6 and 7 to agree a draft on how to implement CRD III, the draft directive that contains the framework law on remunerating bankers.

Once CEBS gives its view the issue will go out to consultation for a month, with implementation of the new rules timetabled for Jan. 1, 2011.

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