The biggest US banks should be doing what EU banks are now required to do under the new pay legislation.
The European Union’s new rules forcing banks to defer bonuses and limit cash payouts to employees should be among the strictest in the world.
The EU legislation sets in stone practices on pay that banks are forced to adopt after the crisis and introduces another layer of rules in an area which banks had hoped had moved out of the regulatory spotlight.
Under legislation agreed by the European Parliament and the council of member states, banks in the 27-nation bloc would have to defer 40 to 60 per cent of bonus payments for at least three years and at least half of the money would have to be paid in shares or other instruments linked to the banks’ performance.