Bankers bonus law - act now says McCarthy

Arlene McCarthy

A new European law to tackle bankers' bonuses will be formally signed today (Wednesday 24 November) in the European Parliament.

Local Labour Euro MP Arlene McCarthy, the Parliament's draftsperson for the new law, said: “In the week the ConDem govt pledged £7 billion of taxpayers' money to the Irish rescue package to deal with the fallout of bank failure, Chancellor Osborne has still not committed to implementing this new EU law to tackle the £7 billion bonus pot set aside by UK banks.”

“I am calling on the Coalition Government to implement the rules and apply the law to the upcoming bonus round. The Government have continued behind the scenes attempts to weaken the law, but must now get on with reforming the bonus culture and stop letting the banks off the hook.”

A key provision of the new law, introduced by Arlene McCarthy, is a strict limit on upfront cash bonuses, to ensure bankers aren't paid for failure. The UK Government has been trying to weaken this position and allow up to 50% of a bonus to be paid in upfront cash.

Ms McCarthy added: "It is completely unacceptable for banks to continue to pay big cash in hand bonuses for risk taking that could lead to failure. This kind of bonus incentive led to the crisis."

“At a time when the government is making substantial cuts, scaling back public services and cutting support to families and businesses, our constituents expect banks to prioritise stability and lending over bankers' pay and perks. This Government must now respond to the public's concerns by implementing these tough reforms to end the obscene bonus culture.”