June 11, 2014 / 11:31 AM / 3 years ago

EU watchdog to consult on banks' use of pay allowances

2 Min Read

LONDON, June 11 (Reuters) - The European Union's banking watchdog will consult with the banking industry in December on whether banks can offer staff extra allowances without busting an EU cap on bonuses

The EU has approved a law that caps bankers' bonuses to no more than twice their salary, but some lenders are paying monthly or quarterly allowances to boost salaries to mitigate the bonus limit.

The European Banking Authority (EBA) is studying whether such allowances are in breach of the EU bonus cap and its chairman, Andrea Enria, said on Wednesday there will be preliminary findings available soon.

"We will have a consultation paper in December on this issue," Enria told reporters.

"But in the meanwhile we are already reviewing the practices and probably in the coming weeks we will come out with some preliminary assessment of the practices we have seen in the market," Enria said.

"We have to go through the contracts, the framework contracts and understand how they work and whether they are in line with the legislation," Enria added. (Reporting by Huw Jones; Editing by Pravin Char)

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