The European Parliament, the elected legislative body of the European Union, voted on Tuesday in favor of a new law that caps bankers’ bonuses and implements other financial-sector reforms.
Going forward, the new rule says, bankers won’t be able to collect bonuses above one year’s salary. The only exception is if the majority of bank shareholders vote for a larger bonus — but even then, the amount can’t be larger than double the annual salary, The Associated Press reported.
The new rule takes effect next year and applies to all EU bankers, even those who work overseas.
“We are making our banks more resilient to crises with today’s decision to that they no longer have to be bailed out with taxpayers’ money,” said Othmar Karas, a conservative lawmaker from Austria who helped create the legislation, AP reported.
That’s just one of many financial reforms in the 1,000-page law. Another provision lays the groundwork for the hiring of a central banking supervisor who would oversee the 17-state eurozone, AP reported.
The rules are regarded as “the most comprehensive and far-reaching banking regulation in the EU’s history,” Mr. Karas said, as AP reported.
• Cheryl K. Chumley can be reached at cchumley@washingtontimes.com.
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