European regulator approves crackdown on bankers' bonuses

A crackdown on bankers' bonuses was approved by European regulators today in a move to curb excessive risk-taking in the industry.

Bankers will be allowed to receive only 20% of their bonus up-front in cash and the rest either deferred or held in shares for a minimum of three years under tougher guidelines published by the Committee of European Banking Supervisors (CEBS).

CEBS - made up of representatives from banking supervisory authorities and central banks across the European Union - said the laws promoted "sound and effective risk management".

The rules, which will come into force from January 1, are the latest in a line of measures designed to repair some of the damage caused by banks in the financial crisis.

Yesterday, Irish Minister for Finance refused to impose a punative tax on €40m worth of bonuses for AIB's top executives.

The British Treasury published final draft legislation for its new bank levy - which will raise £2.6bn (€3.1bn) by 2012 through taxing the balance sheets of UK's largest banks.