An entrepreneur says capping banking bonuses will backfire on the EU and have a catastrophic effect on the City of London.
Ex-investment banker and now property maintenance and refurbishment boss Will Davies said: “These new rules will drive up fixed costs for banks massively because salaries will have to be increased if talented bankers aren’t to migrate elsewhere.
“The City of London is obviously home to the world’s leading international banks.
“As these banks expand, almost inevitably they will look to outside the EU if their best staff can earn more money there,” he said.
EU delegates reached the new provisional deal to cap banker’s bonuses at one year’s salary.
Prime Minister David Cameron was among those who actively campaigned against the introduction of a cap.
Under the new rules any bank operating with the EU would need specific approval from shareholders to pay a bonus that was higher than one year’s salary.
“This is yet another cheap shot at bankers from politicians who would do better to concentrate on clearing up their own mess and the media dutifully lap it up,” said Mr Davies.
“We need all the talent and experience in our bank boardrooms that we can muster if we are ever to reach a financial recovery.
“If the politicians and bureaucrats continue to hammer away at the banking industry we will all end up paying for that in the future.
“Successful bankers have got to where they have by being the best at what they do and they are crucially important to our hopes of recovery. Trying to cap their bonuses will simply drive them elsewhere.”