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Will Britain's banker bonus challenge succeed?

Thursday, September 26, 2013 - 01:39

Sept 26 - Britain has launched a legal challenge to the European Union's cap on banker's bonuses, which London fears will hurt its financial industry. Kirsty Basset reports.

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He's been accused of defending big city bonuses and privileges. UK Finance Minister George Osborne has long argued that European reforms aimed at preventing a repeat of the financial crisis - go too far . Now Britain is launching a legal challenge against the EU's cap on banker's pay, due to take effect next year. Commerzbank economist Peter Dixon. (SOUNDBITE)(ENGLISH) COMMERZBANK ECONOMIST PETER DIXON SAYING: "I think if you limit bonuses, it's something which provokes howls of discontent from people who work within the industry." EU politicians want bonuses to be capped at no more than a banker's fixed salary, or at the most, double - with shareholder approval. They say they need to bring stability back to the banking system. But Britain's Treasury says the reform goes too far - and will make banks riskier - as it will lead to higher wages. At stake - the UK's financial industry. (SOUNDBITE)(ENGLISH) COMMERZBANK ECONOMIST PETER DIXON SAYING: "It brings an awful lot of talent into the UK which otherwise might go elsewhere. And I think from an economists' point of view I would argue that does help to boost growth. And of course finance generally does play an important role in a modern industrialised economy. And so I think it's important politicians begin to recognise what they actually have, and don't treat finance as they have other nationally important industries such as cars over the past thirty years." h The cap was approved at a time of public anger against bankers after they were bailed out in the financial crisis. Now it will be up to Europe's top courts to deteremine what they're worth.

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Will Britain's banker bonus challenge succeed?

Thursday, September 26, 2013 - 01:39