British banks to defy EU over pay allowances

London

European Banking Authority's request for banks to change policies related to 'allowances' expected to go unheeded this year.

The Telegraph reports that British banks will defy the European regulator in continuing to use 'role-based allowances' to navigate the controversial bonus cap, in a move likely to increase tensions between Brussels and the City.

The European Banking Authority (EBA) last week told financial institutions to cease paying staff via certain types of allowances, declaring that they constituted a breach of EU rules that limit bonuses to 200pc of salaries.

However, it is understood that Britain’s biggest banks will continue to use them in next year’s pay round, and are expected to receive the tacit support of the Bank of England in doing so, according to senior individuals in the sector.

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Banks set to defy European regulator on bonus rules

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