The number of City financiers who took home more than €1m jumped to nearly 3,000 in 2014, with one earning up to €25m that year.
The European Banking Authority (EBA) said the UK had more than three times as many high-earning bankers as the rest of the EU combined.
The regulator’s data showed that the number of high earners across the EU rose 21.6% to 3,865 in 2014, from 3,178 in 2013. The majority – 2,429 – worked in investment banking. It was the first year when the EU bonus cap was implemented and new EBA rules on banks reporting staff remuneration took effect.
The overall increase was driven by a 40% leap in the number of high earners in the UK, to 2,926 from 2,086, which partly reflected exchange rate effects as most City bankers are paid in sterling. Stripping out currency effects, the increase would have been 16%, or 339 more high earners in the UK. The EBA put this down to banks making higher net profits.
The regulator’s data showed 16 people at financial institutions based in Britain took home more than €10m in 2014, with one earning €24-25m.
Since the bonus cap was introduced in 2014, limiting bankers’ bonuses to 100% of salary, or 200% if shareholders approve, the UK and France have implemented waivers. The UK has excluded hundreds of smaller, less risky firms such as asset managers and brokers, the EBA found in December. It supports amending the EU directive to exclude small firms from the bonus cap across the trading bloc.
The regulator said the introduction of the bonus cap had led EU banks to shift remuneration towards fixed salaries. As a result, the average ratio between variable and fixed pay for high earners more than halved to 127% in 2014 from 317% in 2013.
This had little impact on banks’ costs and financial stability, the regulator found, contrary to the fears they voiced ahead of the change.
The EBA’s Bernd Rummel said: “The banks said during the consultation of EBA guidelines that the bonus cap would be very negative for them in terms of cost flexibility and financial stability. We analysed this and found that there was only a small increase in the fixed administrative cost. There was no big impact on the financial stability or cost flexibility.”
In Germany, the number of high earners fell to 242 from 397, mainly due to a decline at subsidiaries of UK institutions in Germany. In all other countries, the number remained broadly stable.
This article was written by Julia Kollewe, for theguardian.com on Wednesday 30th March 2016 12.46 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010