posted on May, 16 2012 @ 04:06 PM
The Basel 3 draft law is a law to be implemented by January 2013 throughout the EU states which more than triples the amount of core capital a bank
needs to hold to 7 percent of their risk-weighted assets. An addition to the draft law only yesterday is that;
Lenders should also be forbidden from giving staff bonus awards that exceed fixed salaries, in the proposals approved by members of the European
Parliament’s economic and monetary affairs committee in Brussels yesterday. The amendments will be part of the EU assembly’s negotiation position
in talks with governments on the legislation
While the position of the financial institutions are very much against the notion.
Limiting the proportion of bonuses in compensation “intrudes on the important role of shareholders to determine key questions on pay and
commercial strategy,” Simon Lewis, chief executive of the Association for Financial Markets in Europe, said in an e-mailed statement. “It could
also introduce additional fragility to the European banking system by increasing banks’ fixed costs.”
I personally do not see the point that this proposal would somehow weaken the banks to have their pay fixed, I would doubt they save any money doling
out bonuses as excessively as they have been in recent years. While I agree that in a bad year a bank does pay out a little less (
JPMorgan Chase & Co.
revealed earlier this month that it set
aside 36 percent less than the year before to pay its investment bankers) I do not see how setting a higher salary and paying less in bonuses would be
detrimental in any way to bankers.
This is something I hope they can keep as part of the laws in as many countries as possible.
Full article here: www.bloomberg.com...
16-5-2012 by Jameela because: (no reason given)