(Victoria Jones/PA)
(Picture: PA Wire)Four days before Christmas in 2015, a hefty 173-page document landed on my desk at work. It was filled with big, bewildering words like ‘prudential consolidation,’ ‘solvency buffer,’ and ‘ex post risk adjustment mechanisms,’ and it was about to wreak havoc on Europe’s big financial institutions.
The document’s tangled title reflected its origins, in years of discussion, research, and consultation on how to reign in the excesses of the global banking industry in the wake of the 2008 financial crash. The Guidelines on sound remuneration policies under Articles 74(3) and 75(2) of Directive 2013/36/EU and disclosures under Article 450 of Regulation (EU) No 575/2013 ran to 326 separate paragraphs of rules, but they had a pithier purpose: setting the EU’s bankers’ bonus cap. It would also shine a spotlight on the internal operations of Europe’s big banks, who had never experienced this degree of scrutiny and were not accustomed to interference with how they paid their staff.
