Boris Johnson: Europe's banker bonus cap plans 'deluded'
'People will wonder why we stay in the EU', London mayor says of new Brussels proposal
LONDON mayor Boris Johnson has attacked an EU proposal to cap bankers' bonuses as one of the "most deluded" to come out of Europe in almost 2,000 years.
Under the proposed new curb, bonuses would be limited to a year's salary, giving Europe the world's strictest rules over payouts. However, The Guardian reports there are fears the City of London could see an exodus of talent to New York, Hong Kong and Singapore if the plans are implemented. Johnson described the European Parliament's proposals as "a boost for Zurich, Singapore and New York" at the UK capital's expense.
"People will wonder why we stay in the EU if it persists in such transparently self-defeating policies," he said. “Brussels cannot control the global market for banking talent. Brussels cannot set pay for bankers around the world. This is possibly the most deluded measure to come from Europe since Diocletian tried to fix the price of groceries across the Roman empire." Roman emperor Diocletian introduced an cap on food prices in AD 301.
Johnson's comments came after David Cameron's spokesperson said the prime minister had "real concerns" about the proposals, saying the City had already shown "real responsibility and restraint" on payouts with bonuses "very significantly" down on 2010 levels. "The UK believes it has some of the toughest remuneration requirements in the world. They are incentivising long-term behaviour – the idea of deferred payments, with a significant proportion in shares that can be clawed back over a period of time. At the heart of this is aligning the incentives with long-term performance and stability," the spokesperson said.
Cameron has called for the regulations, under which bonuses could rise to two years' pay with explicit agreement from shareholders, to include more flexibility. Treasury minister Greg Clark will raise the issue at a European finance ministers' meeting next week.
Many countries, however, believe the plans to cap bonuses will address taxpayer anger at bankers' greed – and the move will become EU law if it is approved by a majority of states. ·