Some of the world's biggest banks have appealed to Europe's banking watchdogs to water down plans to curb bonuses or risk losing its best bankers.
Representatives from Credit Agricole and BNP Paribas said at a hearing in London last Friday that the EU rules were stricter than those proposed by the global Financial Stability Board and would not create "a level playing field". They claimed that banks could lose staff to the US and Asia.
The six main concerns on the bonus rules related to the strict limits on cash that could be paid upfront; taxation on deferred payments; the application of the rules on subsidiaries not based in Europe and retention periods for bonuses paid in shares. Others include what equity instruments could be used by organisations, such as co-operative societies, which cannot issue shares and the employment legislation legality and fairness of applying the rules retroactively to bonuses for 2010.
Representatives from Goldman Sachs, Citi, Barclays, and Deutsche Bank, raised similar concerns. Following the consultation, written submissions must be made by 8 November and the final proposals will be published in December. The new rules are meant to be in place by 1 January.