The rules, which will be the toughest in the world, will curb bonuses to their size of their salaries, or two times pay if 50pc of shareholders agree in a vote.
But the City’s big fear was raised as Spain’s finance minister, Luis de Guindos, called for bank salaries to be restricted by law too.
“We are very much in favour of the limitation on variable remuneration but that’s not the only issue,” he said. “The question is also the entirety of remuneration, which is sometimes more important. And Spain’s position is that shareholders’ meetings must have a major involvement and should decide the overall remuneration of bankers.”
And that’s the good one.
That shareholders, the owners of the company, should have the ultimate control over the amounts paid to their employees is just fine. Excellent even.
The problem is of course that it’s entirely contrary to the current proposal. If shareholders are to be the arbiters and they decide to pay large bonuses then that should be just fine: for if shareholders are to be the arbiters then they should indeed be such, without the law then imposing requirements upon them.
It’s an either or: ignorant politicians deciding these things (and none of the EU politicians working on this have any experiuence at all of high finance) or shareholders, the people deciding what to do with their own property?