For the first time in its history, the European Union will make a radical regulatory step regarding the salaries of bankers - the amount of their bonuses will be limited. Since the beginning of 2014, the bankers' bonuses will be reduced to the amount of their annual salary. They will be able to achieve twice the basic salary at the maximum if so agreed by the majority shareholders. The measure will cover not only the bankers working in the EU but all those who work in institutions located in the EU. It was agreed by the representatives of the EU member states and the European Parliament on the last day of February.
This most restrictive limitation of bankers' salaries in the whole world is a result of the public dissatisfaction with the level of financial remuneration of bankers during the economic crisis. It forms a part of wider European legislative measures aimed at preventing another economic crisis which must now be approved by the individual EU countries.
The decision to limit bonuses for bankers at the EU level is mainly a defeat for the UK whose representatives were trying to protect the financial center of London - City - against the regulation. The European Union promises a precedent for the rest of the world from this step. At the same time, however, critics come up with the fact that the banking sector will respond to the regulation by creating even more complex reward structures which will finally retain the original amount of salaries. If not, they will leave the EU.
Day after the European Union's announcement of limiting the amount of bankers' bonuses, one of the strictest regulations of executive salaries was approved also in Switzerland.
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