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Sharon Bowles MEP hails victory over bankers´ bonuses and casino banking

July 28, 2010 6:00 AM

South East Lib Dem MEP Sharon Bowles, who chairs the European Parliament's influential Economic and Monetary Affairs Committee, has hailed the new EU law to rein in bankers´ bonuses as a landmark success. The tough new rules voted through the European Parliament will be implemented in time for this year's bonus payout. This will stop bank directors such as Fred Goodwin walking away with excessive bonus style pension pots if their bank fails.

The new laws will also 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.

Sharon Bowles 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. As a result of the amendments I tabled, there will be no more cases like Fred Goodwin's"

"Bonuses dressed up as pension benefits will be stored as a bank asset for a minimum of 5 years, so the bankers will now be the first to take the hit if the bank performs poorly or collapses. 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 argument that our financial ´talent´ will move abroad doesn't wash either, the UK and the EU as a whole are global financial players and I'll certainly be happy to see the backs of those who don't want to play by our rules. If bankers want to play poker with the Swiss Franc, good riddance, in the meantime we can get on with re-building a sustainable economy, which is no longer held to ransom by a few financial institutions, but pays heed to all its citizens."

The new laws will also curtail casino banking by a fourfold increase in the capital banks will now be forced to hold when they engage in risky trading.