European Union caps bankers’ bonuses in historic move

The European Union has agreed to impose caps on bankers’ bonuses, an unprecedented move made despite the objections of U.K. financial sector bigwigs.

As the Guardian reported, heads of 27 different countries met Wednesday to decide the fate of banker salaries amid a rash of financial scandals over Libor rates and on the heels of a broader EU initiative, the Capital Requirements Directive. The initiative requires banks to take steps to ward off the need for taxpayer bailouts.

Under the new rules, bank bonuses cannot exceed a year’s salary. In certain cases, bonuses may be doubled, but only if a majority of shareholders allow it, the Guardian reported.

“For the first time in the history of EU financial market regulation, we will cap bankers’ bonuses,” said Othmar Karas, an Austrian official involved in the EU negotiations.