European lawmakers defend decision to cap banker bonuses
March 1, 2013 -- Updated 2340 GMT (0740 HKT)
- Policymakers of the 27-nation European Union agreed a provisional deal to cap bank bonuses
- The proposal needs to be formally agreed by ministers and threatens to spark an exodus
- The move is part of a broader push by EU policymakers to bring stability to the region's banks
(CNN) -- European politicians won't dictate to bankers who will be paid bonuses, according to Philippe Lamberts, European Member of Parliament.
This week policymakers of the 27-nation European Union agreed a provisional deal to cap bonuses for bankers at a year's salary, or two years' pending shareholder approval.
The provisional bill has been heavily criticized by Britain's David Cameron, who says it will unfairly impact London's financial sector -- the largest in Europe -- but Lamberts insists the deal isn't singling out the UK.
"We are not picking and choosing who may get bonuses," Lamberts, a member of the Belgian Green party, told CNN's Richard Quest.
Although the proposal still needs to be formally agreed by ministers, it threatens to spark an exodus of top baking talent from Europe as financiers seek to avoid the cap.
If implemented, experts say the policy would be particularly detrimental to the UK economy, which relies heavily on London's finance sector.
But Lamberts says he is not "overly concerned" if the banker flight rids the European financial sector of excessive risk and circumvention of banking regulation.
Lamberts said: "I am not denying that there are maybe banking jobs moving away from Europe."
The move is part of a broader push by European policymakers to bring stability to the region's banks. Last year, legislators in Brussels agreed to give the European Central Bank regulatory powers over eurozone banks.
"When banks are putting together remuneration schemes [where there] are very strong incentives to take excessive risk, if not to breach the law, then we have to intervene," Lamberts added.
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