London Mayor Boris Johnson lashed out at a European Union cap on bankers' bonuses on Thursday, warning that the move will shunt banking business away from the City of London and towards Zurich, Singapore and New York.
'People will wonder why we stay in the EU if it persists in such transparently self-defeating policies', Johnson said. 'Brussels cannot control the global market for banking talent, Brussels cannot set pay for bankers around the world'.
In the meantime, the news agency also reports that the EU's Alternative Investment Fund Managers Directive says 40-60% of a hedge fund manager's bonus must be deferred and no more than half can be paid in cash. The rest must be made up of units of their fund or an equivalent.
There is confusion about how the rules will apply in practice, with large gaps around the treatment of tax and dividends.
'It is potentially a massive concern if it all goes horribly wrong. But it is not yet clear (what might happen)', one industry executive told Reuters.
image: © BackBoris2012