EU talks to cap bankers' bonuses stall

Tue Feb 19, 2013 2:07pm EST
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By John O'Donnell and Claire Davenport

BRUSSELS (Reuters) - Negotiations to introduce a cap on bankers' bonuses in the European Union stalled on Tuesday, after EU countries and the bloc's parliament clashed over how far to go in curbing pay for the industry's top earners.

The talks, described as tense by one person present, with some in the room "doing a lot of yelling", resume next week.

Although a cap on bonuses still appears likely, it is unclear whether the limit will be set at the level of a banker's annual salary as early indications suggested, or higher.

Lawmakers in the European Parliament, backed by Germany and France, have argued that caps on bonuses will prevent the reckless risk-taking that led to the financial crisis, but they face opposition from Britain, home to the region's financial capital.

Othmar Karas, the Austrian member of parliament who is negotiating the final shape of the law, said the parliament was sticking to demands for a maximum limit on bankers' bonuses of two times salary if given shareholder approval.

"This chapter has not ended," he told reporters after the talks.

Another official who followed the discussions said there had been no agreement on bonuses, with several parties unhappy with a proposal to allow for a higher cap of three times salary.

"There still remain a few issues to be resolved," said a spokeswoman for Ireland, which as the holder of the rotating EU presidency, steered the talks.   Continued...

Othmar Karas, delegate of the European Parliament and member of Austria's Peoples Party (OeVP) (R) delivers a speech as Austrian President Heinz Fischer and Green Party member Johannes Vogenhuber (L) listen during a discussion about European Union issues in Vienna April 9, 2010. REUTERS/Leonhard Foeger