The European Union appears well on its way implementing strict caps on banker bonuses, with finance chiefs for 26 of the 27 EU nations backing the proposed rules. The caps have ruffled many a feather on both sides of the pond, as the rules also apply to Americans working for EU banks as well as the U.S. units of European banks.
With the caps already set to affect bankers living on American soil, speculation has arisen that the U.S. could eventually consider similar regulations. We asked Alan Johnson, founder of compensation-consultant firm Johnson Associates Inc., about those chances. He also provides his thoughts on the politics behind the proposed EU regulations.
With the EU pushing forward with bonus caps, do you expect the U.S. to follow suit?
I don’t think so. U.S. regulators found out up close and personal how difficult it was to impose pay restrictions included in TARP. Plus, it goes counter to banks trying to be less risky. Anything that encourages larger salaries is just plain dumb.
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eFinancialCareers / March 6, 2013