The blight of worldwide economic crisis has prompted European Parliament to vote in favor of capping EU banker bonuses, 625-28. The degree to which banking employees can draw large pensions was also addressed by the vote. Any form of short-term cash bonuses of this nature will fall under Parliamentary sway. It's a move the European Union hopes the rest of the world will follow in kind.

Article resource: EU banker bonuses capped by European Parliament

EU banking decision will put hold on advance cash bonus dollars

Beginning in 2011, advance EU banker bonuses will only be allowed to reach 30 percent of annual advance loan cash. The 70-percent remainder will be held back and distributed only if the business performs at a high level for the year. The operative notion is that withholding most of the bonus will prod EU banker bonuses based upon on performance, rather than a gentrified system. Michel Barnier, the EU financial services commissioner, told the AP that "There will be no return to business as usual".

Giant early withdrawals will be capped at 20 percent

For big banks where executives get bigger bonuses, they can have only 20 percent of their bonuses until business performance is taken into account. However, as the AP indicates, what constitutes a "large" bonus was not spelled out in detail by the European Parliament. The entirety of the European Union – comprised of 27 member countries – could be bound by the ruling on EU banker bonuses. Countries like Great Britain, France and Germany reportedly had effective banker bonus caps in place.

Additional cash on hand will be required

As part of the new rule, European banks beginning in 2012 can have to keep at least a minimum level of operating capital on hand to cover risky ventures like mortgage-backed securities. Three to four times more capital will be required than normal, writes the AP. The worry on the part of the banks is that the open-endedness of this requirement may paint them into a corner and require that they hold onto so much that profits will plummet. Try convincing the public to cry for the banks and see what happens.

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USA Today

usatoday.com/money/world/2010-07-07-eu-bank-bonuses_N.htm