Barclays bankers set for bigger bonuses as EU attacks 'loophole'

European authorities are confronting the Bank over its relaxed approach to caps

Brussels regulators are heading for a clash with the Bank of England over the way it is allowing City banks to get around its new bonus cap rules. The latest flashpoint emerged as Barclays was finalising controversial bonus hikes for its investment bankers despite having to tap shareholders for £6bn of extra funds.

The European Commission has ruled that banks cannot pay more than two times a banker's salary in bonuses. Officials hope this will serve to reduce the temptation for bankers to take risks that are dangerous to their banks and the financial system.

But Goldman Sachs in London, Barclays and HSBC are all proposing to get around the rules by offering a "role-based allowance".

Goldman is said to have had its scheme approved by regulators, as the allowance will be varied every month depending on the state of the economy. Barclays' proposed monthly allowance will be varied annually. Full details will be published before a shareholder vote on the scheme at its spring annual general meeting.

However, the commission is clearly concerned that this is merely a bonus by another name, and has demanded an explanation from the banks' Prudential Regulatory Authority over how it can approve them. An official told Reuters the commission had demanded the European Banking Authority watchdog "take a strict approach" when demanding answers from the PRA.

Given the British Government's opposition to the caps, analysts said the commission was suspicious that UK regulators were taking a relaxed approach to banks' proposals.

A spokeswoman for the EU financial services chief, Michel Barnier, said: "One would expect banks to interpret this in a common sense and straightforward way without trying to circumvent it by including in fixed remuneration elements which actually vary in level."

Barclays is to offer bonus rises for its staff above the £1.854bn pot paid out last year. Although sources denied reports it would be as much as £2.4bn, it is expected that deals would be more generous.

News of the bonus pots came just days after its chief executive Antony Jenkins turned down a bonus of up to £2.75m for the year.

Mr Jenkins said he had taken the decision due to the historic "litigation and conduct issues" at the bank. However, Barclays sources said the bank had to continue paying top dollar to its investment bankers or face an exodus of its best "rainmaking" bankers.

With investment banks and hedge funds expected to begin hiring more staff during this year, banks say they are feeling renewed pressure to turn up the bonus taps.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
News
news
Arts and Entertainment
Nick Frost will star in the Doctor Who 2014 Christmas special
tvNick Frost, Natalie Gumede and Michael Troughton step up
Arts and Entertainment
Matthew Beard, Ben Schnetzer, Douglas Booth and Jack Farthing in ‘The Riot Club’
filmReview: Sheer nastiness of Riot Club takes you aback
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week