UK defeated on EU bank bonus cap

The European Union’s (EU) proposals to strict new caps on bankers’ bonuses have been approved by member states and the European parliament despite Britain’s objections.

The EU confirmed on Wednesday, March 20 that the new rules would not be applied until January 2014, as the officials seek to give the financial industry some time to complete legal preparations.

The EU decision on the issue, however, is a significant blow to British officials, who believe Brussels’ bank bonus cap will push banking business away from the capital city of London.

“Today’s agreement on a bankers’ bonus cap will usher in a much needed culture change, not just for the City of London, but for the rest of Europe too”, said Sharon Bowles, the chairman of the European Economic and Monetary Affairs Committee.

Earlier in March, British Business and Enterprise minister Michael Fallon warned that the EU bonus cap could threaten thousands of jobs in the country.

Britain’s Trades Union Congress (TUC), however, accused the government of taking the bankers’ side ahead of ordinary people who have been made to pay the price of bankers’ folly.