EU cools on plan for bonus cap

European politicians are likely to back away from plans to implement a region-wide cap on bankers' bonuses, according to a leading British MEP involved in the discussions.

Vicky Ford, a Conservative MEP and member of the European Parliament's Economic and Monetary Affairs Committee, said there was "a lot of sympathy" for more flexible rules that would allow shareholders the final say on how much banks can pay their staff.

She continued: "The problem everybody has is that if you cap bonuses you push up basic salaries and that would go against the previous rules put in place, which require banks to link pay to long-term performance."

Last week, fears were raised that the European Union could limit the ratio of bonuses to salary to 1:1, though banks were reported to be lobbying to get this increased to at least 2:1.

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