Saturday 21 September 2019

Banker pay restrictions will stay, vows Minister Michael D’Arcy

Minister Michael D'Arcy
Minister Michael D'Arcy
Michael McGrath (Niall Carson/PA)

Peter Flanagan

Ireland won’t change its restrictions on banker pay, said Minister Michael D’Arcy today - in the clearest sign yet that the rules will remain in place.

“I’m of the view the decision is made,” the Minister of State at the Department of Finance said in a Bloomberg TV interview in Hong Kong. “The bankers in those institutions are well paid. The threshold is €500,000 and that’s in the very, very  top percentile of anybody earning in Ireland.”

Mr D’arcy’s intervention comes as the Government considers a report from Korn/Ferry International on the future of the limits. It capped salaries at €500,000 and banned bonuses at AIB Group, Bank of Ireland Group and Permanent TSB Group as part of state bailouts during the financial crisis. Even if bonuses are reinstated, payments over €20,000 would face an 8pc super-tax

“Any change in the regime was always going to be fraught with ‘political considerations’,” Eamonn Hughes, an analyst at Goodbody Stockbrokers  in Dublin, said in a research note.

“The central bank’s ongoing culture review and the current mortgage tracker review probably need to be in  the rear-view mirror as well before any progress is made on this issue.”

Michael McGrath (Niall Carson/PA)

A decade after the financial crisis, banker pay is still a  lightning rod and the sector remains hugely unpopular even amid warnings the restrictions are hurting the three banks.

The limits should remain, at least until investigations into a mortgage -overcharging scandal are complete, according to Fianna Fail, which props up the government.

“It would be  inappropriate given we’re still awaiting the results of the  investigations,” Fianna Fáil finance spokesman Michael McGrath said in a phone interview. “I don’t believe it should be considered.”            

Mr McGrath also discounted changing the rules to allow bonuses for lower-paid staff.

“I don’t think we can start thinking about differentiating between levels at least until we see” the Korn/Ferry report, he said.


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