“We are not ready now”, Othmar Karas, the legislator in charge of the EU parliament’s work on the rules, told reporters after the talks yesterday. “I think the council had no mandate to finalise” the discussions, he said, referring to the grouping of EU governments currently chaired by Ireland.
The EU, like the US, has struggled to agree on legislation to apply the international standards on capital, known as Basel III, which were published in 2010 as part of efforts to prevent any repeat of the financial crisis that followed the collapse of Lehman Brothers Holdings Inc.
Talks were deadlocked last night on five issues, Karas said. Lawmakers failed to agree on bonus conditions which would allow bankers to receive as much as twice their fixed pay with shareholder approval, powers for the European Banking Authority, capital requirements for systemically important lenders, tax and profit disclosure and the ability of individual states to impose tougher rules.
On tax disclosure, “the question of basic transparency requirements” of the profits banks make, taxes they pay and subsidies they receive “on a country-by-country basis” was not resolved and will also be discussed next week, according to a separate statement by Karas and other lawmakers.
Another unresolved issue going into next week’s talks is how much flexibility EU states would have to impose stricter rules on their banks. EU lawmakers have insisted that the EU legislation to implement Basel III include curbs on variable pay as part of a quest to reshape lenders as utilities rather than money-making machines.
Members of the assembly’s economic and monetary affairs committee called last year for an outright ban on bonuses that exceed fixed pay.
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