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Bank charges: EU agrees banker bonus cap
European Union officials have provisionally agreed a deal on new financial rules that will include capping bank bonuses.
It means bonuses will be capped at a year's salary, although this can rise to two years' pay if there is approval from shareholders.
It represents a defeat for the UK, which was opposed to any caps on bank bonuses.
The City is concerned that bonus rules would only serve to drive away talent and restrict growth in the financial services sector.
Ireland's finance minister, Michael Noonan, who headed negotiations for 27 governments, said: "This overhaul of EU banking rules will make sure that banks in the future have enough capital, both in terms of quality and quantity, to withstand shocks.
This will ensure that taxpayers across Europe are protected into the future."
Othmar Karas, the European Parliament's chief negotiator, said: "For the first time in the history of EU financial market regulation, we will cap bankers' bonuses."
The deal should pave the way for Basel III, a major overhaul of the banking system.
Having worked in the city for 19 years, John's main focus is interest rates and corporate finance.
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