More bankers were paid in excess of €1m in Britain than in any other EU nation, according to European Banking Authority
The row over bankers' pay has been reignited by data showing that more than 2,400 bankers in the City were paid in excess of €1m (£870,000) in 2011 – more than three times as many as in the rest of the EU put together.
A total of 3,175 bankers across the EU met the regulatory description of "high earners" – taking home more than €1m in salary and bonuses – according to the European Banking Authority, the pan-EU regulator, with 2,436 of them in the UK and 739 spread across the rest of the EU.
The next largest total was in Germany, where 170 received €1m or more for 2011; in France it was 162. In eight countries in the EU, no bankers received more than €1m, although in countries worst hit by the eurozone crisis – such as Cyprus, Greece, Portugal and Ireland – some bankers earned more than €1m.
Pat McFadden, a Labour MP who sits on the Treasury select committee, said: "These figures illustrate the on-going problem with huge salaries in banking at a time of austerity for most people. The problem with pay in banking is not just the high levels but that bonuses are paid out without risks being understood and on the basis of results that don't look so good in the future."
The information about high earners is available to regulators following the introduction of remuneration codes in the wake of the 2008 financial crisis. The now defunct City regulator, the Financial Services Authority, first began to shed light on pay scales in the City in 2010 when it published data showing that 2,800 bankers received more than £1m in 2009, the first year after the banking crisis.
The EBA will now publish the data on high earners annually as regulators attempt to analyse the way pay deals are structured, particularly as a new bonus cap is introduced across the EU.
The number of high earners was greater in 2010, when 3,435 across the EU received at least €1m – 2,525 of them in the UK. The figures showed a fall in pay between 2010 and 2011 – the average pay of those earning more than €1m in the UK in 2011 was calculated by the EBA as €1.4m, down from €2.3m a year earlier.
The highest average was in Spain, where the banking sector was bailed out by the EU, the 125 paid more than €1m receiving an average of €2.4m in 2011.
Individual bankers earning more than €500,000 face having their bonuses capped at 100% of their salary from 2014, and the new data shows that the City as a whole breaches this cap, paying out €2.7bn in bonuses 2011, which was more than three times as much as was paid in fixed salaries, although this was down on the €5bn – six times salaries – paid out in 2010.
There are expectations that banks may respond to the bonus cap by raising fixed salaries. Nicholas Stretch, of law firm CMS Cameron McKenna, said: "Because London has a very large number of people with variable high pay, the forthcoming bonus capping rules – and extending the number of people caught by the rules – will have a particular impact on our financial services industry and lead to extensive changes in how remuneration is provided."
The UK total of euro millionaire bankers is inflated because it includes those employed by the UK arms of EU banks which have a presence in the City because of its role as a major international financial centre.
Almost three-quarters of the 2,436 who received more than €1m in 2011 were classified as working in investment banking – some 1,809 – while 85 work in retail banking, 182 in asset management and 360 in other business areas.
Unite national officer Dominic Hook said: "There is a huge gap between the highest and lowest paid workers in Britain's financial services industry.
"It is high time that banks addressed this gap. Spreading reward more evenly across the banks would embed a culture of fairness and responsibility."
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