Cap on bonuses a worry for European banks

At stake is their ability to retain staff in some of their most profitable businesses and compete with US firms without boosting fixed costs


THE European Union's largest securities firms will have to raise fixed pay for bankers or risk losing their highest-paid staff to US competitors after the region's banking regulator blocked efforts by 39 banks to sidestep limits on bonuses, according to analysts and recruiters.

The European Banking Authority on Thursday gave firms until the end of the year to bring their practices into compliance with EU rules that ban bonuses of more than twice fixed pay.

Barclays and HSBC Holdings are among...

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