Shareholders to set bank bonuses
Levels of bankers' bonuses are to be dictated by shareholders under new rules from the European Commission.
Finance chiefs in Brussels want investors to be given the power to cap the payments to ensure they do not exceed salaries.
Stefaan De Rynck, spokesman for internal markets commissioner Michel Barnier, said there was a moral issue behind excessive bonuses.
He said: "The bonus culture had an impact in terms of giving incentive to banks to take excessive risks and when liquidity also dried up in the market that led to disaster, as we have seen.
"So we want to legislate on the bonus culture to change that culture. It's important for the efficiency of the bank there's also a moral and ethical issue involved here about excessive payments to bankers we have seen in the past."
Further discussions are expected to take place next week in relation to the radical bonus reform, which would see shareholders of individual banks deciding how much bankers receive in extra payments.
The Commission spokesman said legislation could be finalised within a number of weeks.
Bank of England governor Sir Mervyn King has urged banks to reduce payouts in favour of hoarding cash, while Business Secretary Vince Cable is considering reforms designed to give shareholders more power over excessive pay.
In Ireland, bankers' bonus payments have been banned until mid-2013 at the latest for those institutions bailed out and under State control, including Allied Irish Banks.
The Commission's idea is to give shareholders the responsibility to dictate and then vote on what portion of a banker's salary would be paid as a bonus.