What do the new EU bonus rules mean for business, asks Juliet Carp
On 30 June the EU dropped a bombshell on credit institutions and investment firms. It was announced that new proposals would “transform the bonus culture and end incentives for excessive risk taking”. The message from Arlene McCarthy, the rapporteur in charge of negotiations for the European Parliament, was blunt: “In the last two years the banks have failed to reform, and we are now doing the job for them.”
New rules will affect the timing of payment, form of delivery, and size of bonuses delivered to large numbers of employees working in the financial services sector.
Where can the new rules be found?
The rules are outlined in the proposed new Capital Requirements Directive (amending Directives 2006/48/EC and 2006/49/EC as regards capital requirements for the trading book and for re-securitisations, and the supervisory review of remuneration policies). The proposals could technically change before the directive is adopted, though this is unlikely (EU guidance will follow). EU member states will then need to put flesh on the bones through implementing legislation (and
