Tag Archives: European Union

EU’s Highest-Paid Bankers in U.K. as Bonus Awards Exceed Cap

According to Bloomberg,

Top U.K. investment bankers were paid an average of 1.95 million euros ($2.65 million) in 2012, as bonuses continued to exceed caps set to take effect next year, according to the European Union banking regulator.

The highest-paid bankers in the U.K. had an average bonus-to-salary ratio of 370 percent, according to the European Banking Authority survey of EU finance workers who earn more than 1 million euros a year. In France, the ratio was 495 percent.

The EU brokered a deal in February to outlaw banker bonuses that are more than twice fixed pay, a move lawmakers said would prevent excessive payouts and curb irresponsible risk-taking. The U.K. government challenged the caps at the EU’s highest court in September, saying they were illegal.

“Self-regulation does not work and the report illustrates why the European Parliament took the unprecedented step of inserting a hard bonus cap in the absence of action by the industry,” Arlene McCarthy, a U.K. lawmaker in the European Parliament’s Socialist group, and lead legislator on a previous round of EU bonus rules, said in an e-mail.

Britain was home to 2,188 investment bankers earning more than 1 million euros in 2012, the highest amount in the EU, while Spain had 37, the London-based EBA, set up in 2011 to harmonize banking rules in the EU, said in the survey. France and Germany had 117 and 100.

Capping Bonuses

Workers Pass Clocks in the Canary Wharf Business District (Bloomberg)

Workers Pass Clocks in the Canary Wharf Business District (Bloomberg)

The EBA said in May that any banker paid more than 500,000 euros should be covered by the new rules capping bonuses. The watchdog also targeted the best-paid 0.3 percent of staff in a bank, and some bankers with bonuses higher than 75,000 euros.

The boost to fixed pay means “less alignment between performance and pay,” Syed Kamall, a U.K. Conservative party lawmaker who represents London in the European Parliament, said in an interview.

Senior retail bankers in Spain were better paid than their investment banking colleagues, and were the highest-earning in Europe in 2012, making an average of 2.2 million euros a year, according to the report. That’s compared to 1.7 million euros for investment bankers there.

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UN: Plan Charts Path to Climate Accord Limiting Pollution

According to Bloomberg,

Envoys from almost 190 nations endorsed a program that sets out steps toward the next agreement aimed at reducing global warming, after accepting a compromise that watered down the responsibilities of developing nations such as India and China.

Delegates at a United Nations conference in Warsaw today backed a plan from India and China calling for all nations to make “contributions” to reducing fossil-fuel emissions within the next two years. The language was less strict than the “commitments” suggested by the U.S. and Europe.

The language was agreed upon in an informal huddle of diplomats at the talks, which ran a day behind schedule amid divisions between richer nations and poorer ones about who was responsible for climate change and who must move first. The decision on the timetable for future action was among the most controversial issues at the meeting.

Envoys are still debating a number of other measures, including a loss-and-damage measure for nations most vulnerable to climate change, and financial aid pledges.

While the Warsaw meeting was never meant to be a breakthrough in the fight against global warming, it was to put in place the key building blocks necessary for a treaty the delegates aim to agree on in 2015 and that would come into force five years later.

Finance Debate

The envoys had locked horns on finance, with China, India, Bangladesh, Cuba, Nepal and Nicaragua demanding rich nations agree to an interim milestone on the way toward their $100 billion aid pledge. Nicaragua, speaking for a group of 130 countries, sought $70 billion in aid by 2016. That dispute has yet to be resolve.

“We still don’t have a road map on finance. We have had proposals,” Indian envoy T.S. Tirumurti told the conference today. “The sense of urgency is missing.”

The U.S. and European Union so far have resisted making more commitments on aid, partly because of their own economic difficulties and partly because they want aid to flow along with commitments from poorer nations on cutting emissions. Developing nations have no mandatory limits under the Kyoto Protocol, a 1997 treaty that remains the only global pact limiting global-warming pollution.

“The real annoyance seems to be on the lack of progress on financing,” said Bas Eickhout, a member of the European Parliament’s delegation to the talks. “I have the feeling this deadlock can be broken by some kind of concession on a sub-target on finances in 2016. If not, this entire endgame may derail, which is the worst outcome.”

Typhoon Impact

The typhoon that devastated the Philippines this month amplified the anger of developing countries that industrial nations are backtracking on previous pledges. Japan, Australia and Canada have watered down commitments on emissions. The Warsaw talks mark the first time since the UN started these discussions in 1992 that ambitions have been scaled back.

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Failure to Reach Iran Deal Creates Opponents Time to Lobby

According to Bloomberg,

Iran and world powers failed to reach a deal limiting the Islamic Republic’s nuclear program, creating an opening for opponents from Israel and Saudi Arabia to the U.S. Congress to lobby against the first-step plan before negotiations resume in 10 days.

Iranian President Hassan Rouhani (Bloomberg)

Iranian President Hassan Rouhani (Bloomberg)

High-ranking diplomats from seven nations fell short of an accord in talks that stretched into a fourth day in Geneva. A next round has been scheduled to begin Nov. 20, European Union foreign policy chief Catherine Ashton said today.

French Foreign Minister Laurent Fabius, who yesterday raised concerns that not enough restrictions had been imposed on Iran’s partially-built Arak heavy-water reactor or the country’s stockpiles of enriched uranium and capacity to make more, told reporters early this morning that more work is needed.

U.S. Secretary of State John Kerry later said, “I feel very confident that this can be done. I’m not going to tell you it will be — but I can tell you it absolutely can be — with good effort over these next days.”

The pause gives opponents in Israel, Saudi Arabia and Washington time to lobby against any deal that would allow Iran to keep sensitive nuclear technologies and to press for new sanctions. After a stop in Abu Dhabi later today, Kerry intends to fly back to Washington to brief lawmakers and try to head off further congressional penalties that President Barack Obama’s administration says could scuttle an accord.

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Next Month, EU’s Groote Seeks Single Parliament Vote on Carbon

According to Bloomberg,

The European Parliament may decide on a draft law to help boost prices in the European Union’s carbon market in a single vote next month, according to a proposal by the head of the assembly’s environment committee.

Matthias Groote said that an accord by governments on the draft plan yesterday speeds up the process by eliminating the need to reconcile the final wording in negotiations with the assembly, according to a letter sent to parliament president, Martin Schulz. The emergency fix for the carbon market would enable temporary curbs on the supply of emission permits.

“I would like to recommend, on behalf of the Environment Committee, that the European Parliament proceed with the vote on the legislative resolution and conclude the first reading at its plenary session of 9-12 December 2013,” Groote, who is in charge of the measure in the Parliament, said in the letter, obtained by Bloomberg News.

The fast-track procedure, if approved by Schulz, would mean the measure would need approval by the Parliament at the December session and then consent from EU ministers to become law. The Parliament already had an initial vote on the market fix in July, when it amended the proposal by limiting to 900 million the number of carbon allowances that can be delayed at auctions between 2013 and 2020 to curb record oversupply.

Representatives of EU governments, which consider the proposal in a parallel procedure, decided yesterday to accept the Parliament’s amendment without changes. Since both sides agree on the wording of the draft law, no negotiations are needed on the subject, according to Groote.

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How could Private-equity Firm Coller Capital manage Intellectual Property?

Source: New York Real Estate Journal

Source: New York Real Estate Journal

According to Bloomberg, Coller Capital, the private-equity firm founded by British financier Jeremy Coller, is in talks with multiple bidders to join in an offer for BlackBerry Ltd. (BBRY), a person familiar with the discussions said.

Coller will put up some financing as part of the bids, said the person, who asked not be identified because the talks are private. The firm, which buys and sells intellectual property, is seeking to acquire about 10 percent of BlackBerry’s patents if it makes a deal, the person said.

The patents of interest to Coller cover technologies ranging from push notifications to messaging, according to the person. BlackBerry’s intellectual property accounts for as much as 20 percent of the company’s total value, the person said.

BlackBerry, which announced in August that it was entertaining bids, has drawn a number of interested parties, though little in the way of concrete offers. Fairfax Financial Holdings Ltd. (FFH), BlackBerry’s largest investor, signed a tentative agreement to acquire the smartphone maker for $4.7 billion last month — without naming its buyout partners or showing that it has lined up financing. Cerberus Capital Management LP is looking at BlackBerry’s books, whileLenovo Group Ltd. (992) has also expressed interest in a BlackBerry deal, according to people familiar with the matter.

Coller, which has offices in London, New York and Hong Kong, is working with multiple parties to ensure that it’s part of a successful deal, the person with knowledge of the talks said. In addition to offering upfront financing, Coller may also share royalties from licensing the patents with the winning bidder, the person said.

BlackBerry co-founders Mike Lazaridis and Douglas Fregin, who walked away from management positions in the company in recent years, are also contemplating a bid. They said on Oct. 10 that they’re working with Goldman Sachs Group Inc. (GS) to explore the idea.

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New EU rules may attract hedge funds: regulator

New EU rules may attract hedge funds: regulator

(Reuters) – One of Europe’s top regulators has some good news for the hedge fund industry; pay curbs are not on the agenda.

While they will avoid the caps on bonuses facing bankers, Europe’s hedge fund managers can still expect restrictions on the manner and timing of their pay under new regulations coming into force on Monday.

The Alternative Investment Fund Managers Directive (AIFMD) is the European Union’s attempt to help protect investors and Gareth Murphy, a former hedge fund manager and equity derivatives trader with JP Morgan (JPM.N), is one of the key figures behind it.

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Hedge Funds Back Off Banks as Mutual Funds Dip In

Hedge funds who have tried to make money out of European banks during the euro debt crisis are becoming frustrated with the sector’s erratic movements just as some bigger, and more patient, institutions are dipping tentatively back in.

European bank stocks .SX7P have risen more than 25 percent since late July, fuelled by relief over new crisis-fighting plans, in particular the ECB’s latest announcements which have triggered hopes of a more lasting solution.

But the sector at the root of the global financial crisis has repeatedly disappointed investors after each attempt to call a floor, from a rally at the beginning of 2009 on hopes that the worst of the global credit crunch was over to short-lived optimism over the European Central Bank’s liquidity injections.