A crackdown on bankers’ bonuses has been approved by European regulators in a move to curb excessive risk-taking in the industry.
Bankers will be allowed to receive only 20% of their bonus up-front in cash and the rest either deferred or held in shares for a minimum of three years under tougher guidelines published by the Committee of European Banking Supervisors (CEBS).
CEBS – made up of representatives from banking supervisory authorities and central banks across the European Union – said the laws promoted “sound and effective risk management”.
The rules, which will come into force from January 1, are the latest in a line of measures designed to repair some of the damage caused by banks in the financial crisis.
On Thursday, the Treasury published final draft legislation for its new bank levy – which will raise £2.6 billion by 2012 through taxing the balance sheets of Britain’s largest banks.