E.U. finance ministers to debate banker bonus cap

Mar 05, 2013, 3:53 AM EST
Spain's Economy Minister Luis de Guindos, left, speaks with Irish Finance Minister Michael Noonan during a meeting of eurogroup finance ministers in Brussels on Monday, March 4, 2013.
(AP Photo/Virginia Mayo)

BRUSSELS (AP) — European Union finance ministers meeting in Brussels on Tuesday will debate the contested issue of whether to legally cap the bonuses bankers can receive.

Many EU countries favor the move, but British officials have expressed reservations, with some concerned it could crimp the financial sector in London, among the world's largest. Under the proposed legislation, bankers' bonuses would be limited to one year's base salary, and double that if a large majority of a bank's shareholders agreed.

The measure is part of a package of financial laws that would require banks to hold more capital and liquidity reserves to shield taxpayers from having to pay for more expensive bailouts. It would also lay the groundwork for a single banking supervisory mechanism for the 17-country eurozone.

The finance ministers won't hold a formal vote Tuesday because technical details of the law package must still be finalized. But officials hope for broad political agreement.

On his way into the meeting, Irish Finance Minister Michael Noonan said Tuesday's session was "very important for Europe as a whole." Noonan will chair the meeting, as Ireland holds the EU's rotating six-month presidency.

He said there was little room for maneuver on the issue of capping bankers' bonuses.

"Ireland made the best possible compromise with the Parliament," he said, referring to the European Parliament. "We were very aware of the British position, and we certainly got over the line a number of requests that the British had made to us. ... There's very little further we can do for them."