"European regulators have confirmed tough restrictions on the bonuses that banks can pay their staff.
Only 20-30% of bonuses can be paid in upfront cash, according to new guidelines announced by the Committee of European Banking Supervisors (CEBS).
The rules are much tougher than those agreed by the G20 countries, raising fears that bankers may emigrate to more lightly regulated countries."
However...
"Some European banks have warned that the rules create an added incentive for their employees to relocate to Asian cities such as Singapore that have looser bonus rules, as well as lower tax rates and access to Asia's booming economies."
Looks like some loopholes need to filed.
I think it is good that bonuses are being limited. Like we talked about in class, they give executives incentives to run the financial sector into the ground for the sake of short term gains at the expense of long-term stability. This article identifies the need for such bonuses to be limited worldwide, not just in Europe.
ReplyDelete