EU SET TO SCORE OWN GOAL ON BANKERS BONUSES

The EU seems set to approve a new cap on bankers’ bonuses, limiting them to no greater than the amount of the basic salary. This is set to not only hurt the EU, but particularly the UK interests. 

London is a major world financial centre, with the UK benefiting from the enormous amount of international trade flowing through. 

As it stands, the proposed new rules don’t just affect the European employees of EU domiciled banks but also their employees worldwide. This would hand such a competitive advantage for banks based outside the UK. For example, JP Morgan (an American bank) would only have to apply this rule to their EU employees and not for their employees outside the EU. So, long term, what’s the point in London based banks, with substantial activities outside the EU staying in the UK?

Banks don’t have to be in Europe to conduct successful business in Euro denominated finance. There are plenty of alternatives that would welcome the opportunity to take London’s place – New York, Hong Kong or Singapore, for example.

Michael Fallon, the Enterprise Minister said ”There is a very special risk we have here in the UK, which does not apply to any other European country, which is that we have major international banks that are based in London but have branches all over the world..…we need to make sure that any regulation that applies across Europe is flexible enough to allow those banks to continue to compete from London”.

Don’t the Lawmakers of the EU get it? We’re in a global economy – yes, legislate about bankers bonuses, but make sure the rules are fair.

Tim Corfield

Straightalkdebt

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Bankers Warn of EU Backlash

George Osborne has been warned by top bankers that anti EU rhetoric that pushes the UK further from the core of Europe could well harm the city.

Any new deal to be negotiated between the EU and the UK repatriating powers could risk retaliatory moves against the financial services particularly by France and Germany.

Any deterioration in trading relations with the EU may put pressure on international banks to move jobs and operations to mainland Europe damaging the UK.

One banker commented, “You have to be worried, generally, about Britain distancing itself from core Europe and what the ramifications are for the financial services sector”.

Other major business leaders, including the president of the CBI, have recently highlighted the dangers that any confrontation with the EU poses and long term damaging effect it may have on the UK’s economy.

Tim Corfield
Straightalkdebt