EU Wants Tougher Bank Pay Curbs, Rating Control

Tuesday, 01 Jun 2010 01:59 PM

The European Commission will on Wednesday announce its intention to extend pay curbs in the financial sector and tighten control of credit rating agencies, EU sources said on Tuesday.

Some of the European Union's leaders have become frustrated with slow progress in regulating a financial industry blamed by many for triggering the worst economic slump in a generation.

Michel Barnier, the European commissioner in charge of an overhaul of banking regulation, will announce further moves to change the industry on Wednesday in an attempt to maintain momentum for reform, the sources said.

At a news conference with European Commission President Jose Manuel Barroso, Barnier will announce the EU executive's plans for further laws controlling pay in the insurance sector alongside banks, they said.

He will present a report, a copy of which was seen by Reuters, underlining the need for "further efforts ... to deal with this problem" and promises "similar legislative measures on remuneration in the non-banking financial services sector."

Barnier will also outline how rating agencies will be put under the watch of a new supervisor, a move officials hope will tighten control of a sector criticized for downgrading European countries as the bloc scrambled to mount a rescue package.

"We have put out the fire with Greece," said one European Commission official. "In the run up to the G-20 meeting, Barroso wants to make clear that Europe is taking the action needed in regulating the financial markets."

© 2015 Thomson/Reuters. All rights reserved.

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