North East MEP backs Bank Bonus Crackdown
North East MEP Fiona Hall, has welcomed today's vote (7 July 2010) in the European Parliament restricting bankers' bonuses in Europe and seeking to ensure that banks are sitting on stronger capital reserves than before the financial crisis. The Liberal Democrat MEP also heavily criticised UKIP and BNP for voting against the tough new laws.
MEPs were asked to approve a deal agreed by EU member state governments and negotiators for the European Parliament in June. The tough new rules will reform the way in which bonuses are paid to top bankers, ending rewards for failure through the back door and remove incentives for the casino banking that fuelled the crisis.
Bankers will receive no more than 30% of their bonus immediately and in cash, or 20% for larger bonuses. The remaining bonus payment postponed for at least three years and will be linked to long-term performance. However, there will be no cap on what bankers can be paid.
Commenting after the vote, Fiona said:
"Since 2008 the public has had to put up with seeing top bankers continuing to take home millions in bonuses, while they see their own homes repossessed. This landmark piece of legislation will put an end to the unjustifiable bonus culture as we know it. The taxpayer will no longer have to pick up the tab for bankers who bring down the financial institutions they work for through short term risk taking and greed.
"The new rules approved today mean that bonuses will become much more closely tied to a bank's actual health and performance. This will be the end to excessive bonuses and unjustifiable risk-taking in Europe.
"It beggars belief that UKIP and the BNP did not see fit to support these measures, I wonder what their constituents would have to say on the matter. It seems that UKIP and the BNP are only too happy to keep throwing money after casinos bankers whilst the public has to pick up the bill."
The legislation was overwhelmingly voted through the European Parliament by 625 in favour to 28 against with 37 abstentions. The new rules will be implemented in time for this year's bonus payout and will stop bank directors such as Fred Goodwin walking away with excessive bonus style pension pots if their bank fails.