* EU regulatory chief suggests squeeze on top banker pay
* Barnier proposes fixed ratio between salaries and bonus
* Commissioner warns failure to act risks backlash
By John O'Donnell and Julien Toyer
LONDON, Jan 23 The European Commission is
considering more rules to curb banker pay, including a possible
limit on how much star performers and managers are paid compared
to junior staff, as well as a fixed ratio on bonuses over
salary, its regulatory chief said on Monday.
In an interview, Michel Barnier outlined his idea for a set
ratio between the pay of a bank's top staff and its junior
employees, warning that failing to introduce stricter rules on
banker pay risked creating a public backlash later.
"If banks are incapable of self-discipline with regards to
bonuses, then we must act," said Barnier, who is the
Commissioner in charge of proposing and writing the first draft
of new Europan Union law.
"Among the ideas that we are exploring is a ratio between
fixed salary and bonus," he said. "Another idea which could be
considered is a ratio between the lowest level of pay in a bank
and the highest level of pay."
Barnier's suggestion, if written into EU law, would
represent one of the most intrusive financial regulations from
Brussels since the start of the financial crisis.
While it is likely to be opposed by bankers in the City of
London and elsewhere, it could prove politically popular.
Barnier will have an opportunity to discuss his ideas with
leaders of finance and industry when he travels later this week
to Davos, in Switzerland, for the World Economic Forum.
The EU has already introduced rules to limit how much of a
banker's bonus is paid out in cash, in one of the most
significant financial reforms yet from Brussels. EU law also
insists payouts are made over up to five years.
The latest suggestion from Barnier, who has grown frustrated
with what he sees as banks' continuing failure to lower pay,
would go further by setting actual limits on how much people are
"Politicians will find it harder and harder to explain to
the wider public as some of them experience hardship why bankers
get such huge bonuses," said Barnier. "If we don't regulate now,
you risk a violent reaction."
(Reporting By John O'Donnell and Julien Toyer. Editing by Jane
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Keywords: EU BARNIER/PAY
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