The UK Government signalled its growing anger over European Union plans to impose a cap on pay for bankers over the weekend when a senior minister with close ties to the Chancellor said that hundreds of thousands of British jobs were being put at risk.
The Sunday Telegraph reports that Michael Fallon, the enterprise minister, said that the Treasury will demand at meetings in Brussels this week that the proposals are flexible enough to allow UK banks and foreign banks based in London to pay competitive rates.
He said that although the new regulations on remuneration would only affect the highest paid, it could ultimately mean whole banking divisions being moved away from the UK as banks seek to operate in the more flexible markets of Asia and the US.
'There is a very special risk we have here in the UK, which does not apply to any other European country, which is that we have major international banks that are based in London but have branches all over the world', Fallon said.
'We need to make sure that any regulation that applies across Europe is flexible enough to allow those banks to continue to compete from London'.
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