Curtailing bonusesRules to prevent bankers taking excessive risks to gain large bonuses are to be updated to close loopholes.
- Monday, 27 April 2015
The London-based European Banking Authority, the EU’s independent monitoring body, has produced new guidelines and given interested parties until June 4 to comment on them.
The initial rules, agreed to in 2013 as a reaction to the economic crisis, limited bonuses to key bank staff to no more than the size of their salary or double that if shareholders agreed.
But Britain, in particular, which hosts the EU’s largest financial centre, was unhappy with them.
This is the first year that bankers felt the full force of the guidelines, but some managed to avoid the limits while some institutions were exempt. They simply created new names for pay that were different from the two covered in the guidelines – fixed pay and variable pay. For instance, Barclays introduced what it called “role-based pay” for its investment bankers that were essentially monthly bonuses that could reflect how well or poorly the bank was doing. But the EBA has cried foul and says this is variable pay and subject to the cap. The Authority also wants to extend its guidelines to other financial institutions owned by banks such as asset management, insurers and private wealth companies. But they have introduced some leeway saying that while big institutions will have to comply strictly to the guidelines, small, less complex institutions may adopt a simpler approach. The EBA say they will take stakeholder views into account when finalising the guidelines which will be in force by the end of this year.
No let-off for driving offences
Taking a holiday from safe driving when on vacation in other EU countries will not be an option this summer. Most visitors up to now could avoid penalties for speeding, breaking traffic lights, not belting-up, using forbidden lanes, drink and drug driving, and talking on their cell phone. Visiting drivers are three times more likely to break speed limits. Figures collected in France show this can be as high as 50% of speeding offences at peak season. But after a difficult, seven-year-long journey, there is now an EU-wide law that allows perpetrators to be pursued across national borders and brought to justice. Member states can now access each other’s national vehicle registration data to track down the driver by going through a specific contact point. And to avoid the usual problems of communication, there is a model letter that can be sent to the lawbreaker in his own language with information about the offence and a demand for payment of a fine and bank details for payment. There will also be a reply form included in case the owner of the car was not driving at the time of the offence. The new directive will replace the existing agreements some countries have to chase up road offenders. And it will include Britain, Ireland and Denmark from 2017. They had opted out under a previous attempt to introduce such rules on a police cooperation legal base. After the European Court struck it down last year, it was reintroduced on a transport legal basis. Before you leave on holiday, check the rules of your destination on the EU website or download the smartphone app: http://ec.europa.eu/transport/road_safety/going_abroad/index_en.htm
Keep on truckin'
New aerodynamic lorries should soon become part of the transport network as the EU updates its rules to take account of new technological developments. The existing rules, which are almost 20 years old, are responsible for the brick shape of trucks but research shows this is not the safest shape or the most fuel efficient. In fact the European Commission says new aerodynamic designs will cut fuel consumption by up to 10% and with it greenhouse gas emissions.
GM plants growing in Europe
Many more genetically modified (GM) plants are expected to be passed for use and cultivation in the EU after a decades-long battle that led to just one, Monsanto’s maize MON810, being grown in Spain and Portugal. Some countries like France and Austria have been implacably opposed to allowing GM plants and have blocked them, while Britain and some other countries have been advocates. Now the process has been partly renationalized with the European Commission, on foot of advice from the European Food Agency, deciding whether a particular GM plant should be banned or cleared for use. But a country can then ban it from being grown within its borders - and any neighbours growing GM plants must take measures to reduce the risk of contamination. It is not expected to end the debate on whether GM plants are harmful or beneficial however.