UK Will Find EU Bank Bonus Cap Hard to Lift

Europeans are impatient with the pace of economic recovery. The European Union surprised the financial industry by imposing a cap on bonuses for banks’ senior managers and traders, and the mood was also reflected by Swiss voters who approved of shareholders having a say on board and executive salaries. The plan is to reduce excessive pay and end the practice of rewards for crisis. How many bankers are affected depends on how regulators define risk-takers. Left-leaning politicians throughout the continent are cheering the trends, but Britain is caught in a bind: British voters, like those throughout Europe, question banks’ role in the five-year financial crisis, but also recognize that London as a financial center drives economic growth and employment. Britain has become marginalized in EU politics, and “The lack of opposition from countries to the European Parliament's radical reform took many there by surprise,” reports John O’Donnell for Reuters. The EU parliament will target hedge funds next. Banks and executives warn that the regulations could drive risk-taker talent to the United States or Asia. – YaleGlobal