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Dutch parliament says cap on bankers' bonuses should be dropped
June 27, 2017 / 9:24 PM / 4 months ago

Dutch parliament says cap on bankers' bonuses should be dropped

AMSTERDAM (Reuters) - The Dutch parliament voted on Tuesday in a consultative motion to scrap an existing cap on bonuses for workers in the financial services industry.

The rule limiting bonuses to 20 percent of fixed pay was instituted under the previous government in response to bailouts of several Dutch banks and insurers during the 2008 financial crisis.

However, it has increasingly been cited as a deterrent for international banks that might consider moving personnel or key operations from London to the Netherlands once Britain leaves the European Union.

The parliamentary vote - in which a motion to keep the cap in its current form was rejected by the four parties currently negotiating a new coalition - is not binding. But it suggests that an abolition or loosening of the cap will be on the agenda of the incoming government.

The European Union as a whole limits financial industry bonuses to 100 percent of fixed pay.

No major financial institution has yet said it will move its European headquarters to Amsterdam, although the city is frequently cited near the top of desirable locations due to tax advantages, its large English-speaking population and good infrastructure and social services.

Outgoing prime minister Mark Rutte’s conservative VVD party won a parliamentary election in March, but he is still trying to form a majority coalition.

The motion to keep the existing bonus cap in place was put forward by Labour, the party of outgoing finance minister Jeroen Dijsselbloem, which is not part of the prospective new coalition.

Reporting by Toby Sterling; Editing by Kevin Liffey

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