Banker bonus curbs backed by the rest of the European Union imperil efforts to make lenders more resilient in crises, the U.K. said in a new attack following Chancellor of the Exchequer George Osborne’s defeated bid to block the measures.
Bloomberg reports that the limits banning bonuses more than twice fixed pay 'will be damaging to financial stability and the soundness of affected credit institutions' and 'are not consistent with internationally agreed principles', the U.K. said in a statement to the EU’s Council of Ministers, published on the EU’s website.
Britain also criticized the broader legislation containing the pay rules, saying it may fail “in certain significant areas” to properly implement global standards agreed on by the Basel Committee on Banking Supervision. The Basel group has promised to report on whether the final version of the EU rules clashes with an international accord known as Basel III.
The U.K., which lacks a veto on financial laws, was the sole dissenting voice opposing a deal struck between governments and EU lawmakers last month on how to apply the Basel rules - which more than triple the core reserves that banks must hold against possible losses. The European Parliament insisted on adding the pay curbs in a bid to stop excessive bonuses that it said spurred irresponsible risk taking.
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