An official from Finance Watch told Reuters: “We are not seeing good news for the economy ten years after the crisis that would justify this.” More than three quarters of bankers paid over 1 million euros are based in London, the dominant Anglo-Saxon financial hub for Europe, and an extension of American influence.
A European Banking Authority study showed how bankers in London have recovered from the spectacular crash ten years ago that triggered state bailouts with taxpayers’ money.
While most of Europe’s high earners each made between 1 and 2 million euros in 2016, the EBA research found that over 500 had been paid even more. Last year, one executive in asset management earned a 30 million euro bonus, taking home total pay of more than 33 million euros.
Such payouts are often at the expense of shareholders in Europe’s banks, the EBA said, reflected in low dividends as London bankers represent an anomaly among the roughly 2,8 million bank staff across the European Union.
Because most of the big earners are based in London, this has skewed the data on the number of high earners which rose from less than 3 500 in 2010 to 4 597 in 2016, the EBA said.
EBA data showed the gulf between London and the rest of Europe. In 2016 Germany had just 253 bankers who earned more than one million euros and Paris had roughly 200, while London counted more than 3 500.
Experts at Helaba bank estimated that Germany’s financial center Frankfurt was less than one fifth the size of London.
Because of Brexit, companies in the United Kingdom’s financial services sector will move some of their activities and staff to the European Union to continue operating in the single market. The United Kingdom’s financial sector is particularly important, representing almost 7 percent of the country’s gross domestic product and more than 3 percent of all jobs.
Around 40 percent of UK banking and investment services exports go to the European Union.
Such companies have “passporting rights,” which allow them to sell their services — such as investment banking, asset management and insurance — in the EU single market without needing to ask for authorization in each member state.
The European Union also has agreements with the United States, Japan and Singapore through a mechanism known as “equivalence,” according to which Brussels grants market access to banks and insurers from countries where the national rules are in line with those of the European Union.
But equivalence excludes commercial loans. More importantly, equivalence agreements are periodically reviewed, which means that Brussels has the right to unilaterally end them. Bankers in the Anglosphere have been pressuring the EU to forego this right.