Legal language of contracts are being poured through.
The European Union’s top regulator is poring through bankers’ contracts as it polices the bloc’s new bonus caps, according to two people familiar with the matter.
Bloomberg News reports that the European Banking Authority is analyzing the legal language of bankers’ employment contracts to determine how so-called role-based allowances are factored into their pay packets, the people said.
After concluding the investigation, the EBA will rule on whether the allowances should count as fixed or variable pay, the people said, requesting anonymity to discuss the issue. An EU law known as the Capital Requirements Directive IV classifies remuneration as fixed or variable without precisely defining the terms.
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