Brexit Aids Bankers' Bonuses Case, Irish Central Bank Says
(Bloomberg) -- The influx of finance firms to Dublin as Brexit looms adds to the case for allowing the return of some bonuses for bankers, Ireland’s central bank said.
The government caps salaries at bailed-out banks at 500,000 euros ($562,000) per year, as well as imposing a tax of 89% on any putative bonuses of more than 20,000 euros.
“There is a risk of losing staff in critical functions or with specialist skills in the areas of IT, risk, compliance and related functions to firms that are not subject to the remuneration restrictions,” Philip Lane, the outgoing governor, wrote to Finance Minister Paschal Donohoe in a letter published on the bank’s website in Dublin on Tuesday.
Lane was commenting on a government-commissioned report on banker pay by Korn/Ferry International. With pay still a lightning rod for taxpayers forced to bail out the banks, there’s no guarantee Donohoe will act, with many senior executives seeing no prospect of a change anytime soon.
In the end, any government-endorsed changes to rules on bonuses are likely to focus on lower-ranking staff rather than executives, according to one person familiar with the matter.
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