The number of millionaire bankers in the world is falling, according to a report by the banking watchdog EBA
The European Banking Authority revealed that the number of bankers earning seven figure salaries in pay and benefits in the European Union fell from 3,530 in 2012 to 3,179 in 2013, even before the impact of a cap on bonus payments came into effect.
Two thirds, or slightly over 2,000 of these high-earning bankers are based in London.
The cap, which has affected bonuses awarded since 2014, limits the amount to no more than basic pay, or twice basic pay with shareholder approval.
In 2013, the average ratio of bonuses to fixed pay was 104.27 per cent. That means benefits were only slightly higher than an employee’s regular salary for high earners who in key roles, down from 108.74 per cent in 2012 and 204.76 per cent in 2010.
The EBA report may be a small taste of things to come for London’s bankers. The new EU law on capping bonuses could see London-based banks reducing remuneration even further. It is expected that the next set of figures for 2014 will show a bigger drop in the bonuses, highlighting the full impact of the EU’s restrictions.
Banks have warned that a far-reaching bonus cap will make it harder to attract top staff. But many of them have already developed new payment measures to supplement their staff paycheck.
The report also stressed that banks need to standardise bonus payments within their own walls. "In addition, the report highlights that remuneration practices within institutions were not sufficiently harmonised," the EBA said.
The EBA, established in 2011, has the power to overrule national regulators if they fail to properly regulate their banks. It brings together bank watchdogs from across the 28-nation bloc.Reuse content