EU negotiations on bankers’ bonus stall

Negotiations in the European Union over the introduction of a cap on bankers' bonuses stalled yesterday, after some EU members clashed with the bloc's parliament over the extent to go in curbing pay for the top earners in the industry.

Reuters quoted an unnamed person as saying that the talks were tense, with a lot of yelling. The talks would resume next week.

Although a cap on bonuses seems likely to be brought in, whether the limit would be set at the level of a banker's annual salary as early indications suggested, or higher is not clear.

According to lawmakers in the European Parliament, caps on bonuses would prevent the reckless risk-taking that led to the financial crisis. Germany and France support the caps while the UK, being home to the region's financial capital, is opposed to any such move.

According to Othmar Karas, the Austrian member of parliament who is conducting negotiations on the final shape of the law, the parliament was sticking to demands for a maximum limit on bankers' bonuses of two times salary if shareholder approval was forthcoming.

"This chapter has not ended," he told reporters after the talks.

Reuters quoted another unnamed official who followed the discussions as saying there had been no agreement on bonuses, with several parties unhappy with a proposal to allow for a higher cap of three times salary.