EBA’s allowance attack lacks legal punch

By Owen Sanderson
16 Oct 2014

The European Banking Authority has published a report on role-based allowances which looks to close a loophole in the European Union’s bonus cap. But the document has no formal legal standing, and its instruction to national supervisors to “to ensure institutions review their remuneration policies so as to comply with the criteria highlighted in the EBA report” by the end of the year goes beyond the EBA’s power.

Banks that do try to match up to the EBA’s standards also risk being caught between a rock and a hard place, since it is still consulting on a more formal set of pay policies. If banks set out salary structures which need changing when the formal guidelines ...

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