* New bonus cap to come despite protest from Britain
* EU officials: rules could be further delayed to mid-2014
By John O'Donnell
BRUSSELS, March 20 European Union lawmakers are
expected to agree on Wednesday to bar bankers in Europe from
getting bonuses bigger than their salary, introducing the first
cap of its kind globally.
One of the most ambitious reforms of the financial crisis,
the cap is designed to address public anger at a bonus-driven
culture many European politicians believe encouraged the
risk-taking that pulled down banks and governments.
It is set to be introduced from next year despite the
objections of Britain. While some token concessions are possible
to show goodwill towards the bloc's financial hub of London, the
decision on a cap will not be reversed.
EU officials indicated that there could be a further delay
to the introduction of the new rules until the middle of 2014 to
allow countries time to complete legal preparations - a delay
that could spare bankers for one more bonus season.
Lawmakers from the European Parliament and diplomats
representing EU countries are to begin talks on finalising the
bonus rules at 1730 GMT. Officials expect a deal to be clinched.
"This was a sobering experience," said one official familiar
with British thinking, who asked not to be named. "It's the
first time the UK was outvoted on financial services.
"There are autopsies being carried out at the UK Treasury.
They will only ask for marginal changes but they cannot change
the fundamental direction," he said. One European diplomat
predicted only "minor tweaks".
The rules, part of a wider capital regime for banks, would
limit banker bonuses to the equivalent of their salary, or two
times their salary if shareholders agree. They represent the
toughest bonus regime anywhere in the world.
They threaten Britain's financial industry the most, raising
the risk that some banks and their top bankers could relocate to
other financial centres outside the European Union.
Earlier this month, Britain's finance minister, George
Osborne, tried to change the rules at a meeting of EU finance
ministers but no one supported him.
His inability to fend off the reform underscored Britain's
waning influence in the EU and is also likely to fuel deepening
euro scepticism in Britain.
The cap has already been softened by allowing banks to
discount the future value of share options, bonds or other
non-cash payments paid out over more than five years.
As it stands, one quarter of a banker's bonus can be paid in
this way but, in an attempt to soften the blow for Britain, this
ratio could be raised in the final round of negotiations.
Such alterations, however, would have only a slight impact
on the total amount of bonus that can be paid.
Furthermore, any changes will require the approval of the
European Parliament, which pushed for the clampdown in a wider
law that chiefly deals with increasing the capital that banks
hold to make them safer.