Bulgaria’s central bank brings in caps on bankers’ bonuses

The governing council of central Bulgarian National Bank (BNB) has approved, at an April 24 meeting, caps on bankers’ bonuses as well as new regulations on capital buffers and risk management in banks.

The decisions are intended at bringing Bulgarian practice in line with the new legal framework of the European Union on the activities of credit institutions, as approved by EU institutions in 2013.

According to the BNB decision, bankers’ bonuses may be no more than 100 per cent of their salaries.

The EU decision on bankers’ bonuses has been deeply controversial and the subject of claims by authoritative commentators on the credit institutions market that it can be evaded, a controversy deepened by a change to the original limitation allowing larger bonuses if approved by 66 per cent of shareholders.

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(Photo of Bulgarian National Bank headquarters in Sofia: Clive Leviev-Sawyer)