Bankers: Action by Christmas, or in court by the New Year!

Glenis Willmott,MEP for the East Midlands, and Labour’s leader in Europe, has welcomed news that The European Parliament and European Commission have joined forces to call on banks to ensure this year’s bonus round complies with EU rules agreed by the 27 finance ministers in November 2010.

Mrs. Willmott said:

“The Banking sector has had over a year to implement these new rules, and I fully expect them to apply the legislation to this year’s bonus round”

“If Banks do not implement them, then under EU rules, national authorities have the power to enforce them”

“Hard pressed families across the East Midlands did not cause the global financial crisis, and they will not tolerate huge bonuses handed out to the people that did, the bankers”

“It is not for the EU to micromanage bank pay practices, but it is our place to ensure compliance with internationally agreed rules that protect the interests of savers and taxpayers.”

European Commissioner for financial services, Michel Barnier, said:

“In the context of the current economic and financial crisis, it is unacceptable and incomprehensible that banks continue to pay excessively high bonuses to their staff when the financial sector was rescued with public money.”

“Banks must now fully implement the EU legislation in their current bonus rounds. The Bank of England’s Financial Policy Committee has made clear this week that banks must prioritise lending and capital over bonus and dividend payments. Our European legislation requires the FSA and other EU national authorities to ensure no bank pays bonuses that undermine the health of the bank or threaten their capacity to lend.

“As made clear by the Bank of England, every pound paid in bonus payments to staff is one pound less in capital that can help banks deal with losses on lending, and therefore around five pounds less in lending capacity for banks to support small businesses and households. The billions in payments that banks continued to make” last year, despite the need for lending and the threat to the economic outlook, have directly endangered the British and European economy.”

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