Outlook It's an interesting, and indeed courageous, political move on the part of George Osborne to go in to bat for the bankers and their bonuses in Brussels.
Not that it's achieved all that much. The bonus cap is coming, and this is an issue where the opinion of the British electorate is very much in tune with that in Brussels.
Disgusted of Tunbridge Wells might not be delighted with the EU generally, but they'll probably be raising a jar to the Eurocrats tonight. We live in interesting times.
There is, though, a question as to whether the cap is legal. At least one lawyer thinks it's not, because under the Lisbon treaty issues relating to salary, generally minimum wages and the like, are left for members states to sort out. The commission, he feels, has had to indulge in some creative application of its powers relating to banking stability to get the measure on the books.
Will this be tested before the European Court of Justice? That's an interesting point. The most likely British bank to indulge would be Barclays, given its big investment banking business. But under Antony Jenkins and Sir David Walker it's much more concerned with rushing around telling people what a good corporate citizen it is than battling over bonuses. Count Barclays out, and the same for the other UK listed banks.
The same for the Europeans, who are also leery of taking on the EU. But the Americans? Now that's a different story. They come from a culture where things are routinely tested before judges to determine what is legal and what is not, and serious consideration was given to putting an earlier piece of EU legislation to the test.
The bonus culture was brought to these shores by the Americans, and it appears that they are at least testing the idea of fighting to keep it here rather than fleeing to the Far East, or at least the Middle East.
It won't likely come to that. When the rules are finalised they'll do their damnedest to find a way around them, and they may well succeed.
But it is worth remembering that despite all the threats to flee, and the fretting by the Corporation of London, London suits them very nicely. They have 90 per cent of their overseas assets here and they want to stay here. We should remember that.Reuse content