Pay levels will fall at investment banks as profit margins are squeezed by regulation that is transforming their flagship business of fixed income trading, according to the head of BNP Paribas.
Jean-Laurent Bonnafé, CEO of BNP Paribas, told the Financial Times that the profitability of investment banks was being hit by new rules forcing them to hold more capital against many activities, banning proprietary trading and driving transactions on to cheaper electronic exchanges.
He also took a swipe at the pay of rivals. 'If you look at other big European banks that are less profitable than us, their CEOs are being paid at least €8m', he said. 'Personally I will get €3m. French banks in that respect and their top executives are very reasonable people. That is the way it is. It is good enough'.
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