The European Parliament has approved a plan to place limits on bankers' bonuses from as from next year, the rule will be applicable to all 27 EU members.
Bankers will receive no more than 30% of their bonus immediately and in cash, the limit falls to 20% for larger bonuses.
The remaining payments will be deferred, and linked to long-term performance.
There will be no cap on what bankers can be paid.
This will have precious little effect on bankers:
1 The rules will not be enforced until next year. Therefore this year bankers will ensure that bonus payments are front end loaded, to avoid the limit next year.
2 Pay levels will be increased to avoid the limits.
3 Banks will circumvent the rules by paying bonuses offshore.