Despite dire warnings from bankers and industry lobbyists thatthe deal would have severe implications for doing business in theEuropean Union, EU legislators agreed late on Wednesday to banbonuses greater than double bankers’ salaries.The deal is seen as a way of calming public anger over thefinancial sector at a time of weak economic performance and highunemployment.In the high-octane world of banking, where star performers areable to earn bonuses many times greater than their base salary, thelegislation attempts to impose some braking mechanisms. Indeed, itrepresents the strictest move on the industry since the 2008financial crisis. For example, banks would need to secureshareholder approval to award a bonus that is more than fixedincome.There do appear to be some loopholes in the legislation,however, that may allow bankers to go beyond the set limit. Whilebonuses that exceed twice the amount of fixed pay would beprohibited, bankers may receive “loss-absorbing securities,”for example shares, according to EU lawmakers. The provision wouldbe granted if the payment of that share of the bonus is deferredfor at least five years, they explained.In addition to taming banker pay at a time when many Europeancountries are witnessing protests over government austeritymeasures, the deal also forces banking institutions to show theirprofits on a country-by-country basis starting in 2015.Meanwhile, EU banking subsidiaries that operate overseas, aswell as American or Asian banks working in the EU will also berequired to follow the new rules.According to the Financial Times, the new bonus rules “willprobably apply to subsidiaries of Barclays and Deutsche bank in theUS, Standard Chartered bankers working in Asia and Goldman Sachstraders based in London.” The agreement, if confirmed, represents a huge victory forEuropean lawmakers, and opens the door for the passage of theso-called Basel III capital rules, an internationally acceptedguideline for preventing another banking crisis.European MPs remain confident that the tough banking measureswill clear the final hurdle.“I find it difficult to imagine that we would now scrap thiscompromise,” Michel Barnier, the EU commissioner responsiblefor spearheading the reforms, said following the parliamentarysession that concluded after midnight in Brussels. Now the deal must be formally endorsed by the majority of EUgovernments, he said.US not ready for EU-style bonus ban European efforts to inject some sanity into an industry that isoften portrayed by rampant greed and recklessness, especially inthe aftermath of the 2008 global financial crisis, is moving in theopposite direction that the US banking industry is taking.Despite an increase in redundancies on Wall Street, theremaining bankers are receiving more lucrative year-end bonuses,according to report issued by the New York State comptroller onTuesday.It was reported that the average financial industry cash bonusrose to $121,900 in New York, up 8% from the previous year,according to comptroller Thomas DiNapoli. The bonusincrease is partly the result of deferred payments fromprevious years, as well as savings from compensation costs,DiNapoli said.Many analysts had been predicting in December that bonuses wouldtumble for a second consecutive year.”Profits and bonuses rebounded in 2012, but the industry isstill restructuring,” DiNapoli said. “Despite its smallersize, the securities industry is still a very important part of theNew York City and New York State economies.”With net bonuses at $20 billion in 2012, they are still lowerthan previous years. In 2010, bankers received $22.8 billion in bonuses, while inpre-crisis 2006, cash bonuses peaked at $34.3 billion.