City ‘scourge’ warns UK over resisting cap on bankers’ bonuses

Michel Barnier says EU needs 'regulation that is intelligent and smart'

Jamie Dunkley
Thursday 17 October 2013 14:35
Comments
EU Commissioner Michel Barnier: 'Our legal basis is the right one'
EU Commissioner Michel Barnier: 'Our legal basis is the right one'

The politician once dubbed “the scourge of the City” today warned that the UK is becoming “isolated” from the rest of Europe by objecting to a cap on bankers’ bonuses.

Michel Barnier, the European Union’s Commissioner for Financial Services, said he regretted Chancellor George Osborne’s decision to contest the policy in the European Court.

The cap will be the world’s toughest curb on pay when it is implemented across Europe next year, and will limit bonuses to no more than a banker’s fixed salary - or twice that level with shareholder approval.

The rules will apply to all banks based in Europe - regardless of whether they are American, Asian, Russian or European - and have led to fears that London will lose out to other financial centres like Singapore and New York.

The Chancellor filed his case in the European Court of Justice late last month amid claims that the reforms will simply push up fixed pay and make banks riskier rather than safer.

“The issue of bankers’ pay is the only one on which the UK has been outvoted on since I have been in charge of financial regulation,” Barnier told the Evening Standard. “I regret the fact that the UK has ended up in a minority. It’s not necessarily the best subject to be isolated on when you consider the excessive risk-taking that took part in the lead-up to the crisis. We don’t want taxpayers bailing out the banks.”

He added: “I remain confident the measures are balanced, reasonable and in the interests of financial stability. Our legal basis is the right one.”

Since taking up his post in 2010, Barnier has championed reforms, such as the financial transactions tax, which have been fiercely contested in Britain.

With a potential referendum on the UK’s membership of the EU on the horizon, he accepts that the 28-member bloc needs reforming, but insists Britain should not leave.

“My first vote as a young French citizen was to say yes to the UK joining the Common Market and I have never regretted that choice,” he added. “Rest assured, we have no interest in undermining the UK and no interest in threatening London’s place as the largest European financial centre – we want to make sure that the UK and other non-euro countries have the safeguards they need.

“Taxpayers ended up bearing the cost of the excessive deregulation of the Eighties … what we need is regulation that is intelligent and smart.”

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in