Sept 26 - Britain has launched a legal challenge to the European Union's cap on banker's bonuses, which London fears will hurt its financial industry. Kirsty Basset reports.
He's been accused of defending big city bonuses and privileges. UK Finance Minister George Osborne has long argued that European reforms aimed at preventing a repeat of the financial crisis - go too far . Now Britain is launching a legal challenge against the EU's cap on banker's pay, due to take effect next year. Commerzbank economist Peter Dixon. (SOUNDBITE)(ENGLISH) COMMERZBANK ECONOMIST PETER DIXON SAYING: "I think if you limit bonuses, it's something which provokes howls of discontent from people who work within the industry." EU politicians want bonuses to be capped at no more than a banker's fixed salary, or at the most, double - with shareholder approval. They say they need to bring stability back to the banking system. But Britain's Treasury says the reform goes too far - and will make banks riskier - as it will lead to higher wages. At stake - the UK's financial industry. (SOUNDBITE)(ENGLISH) COMMERZBANK ECONOMIST PETER DIXON SAYING: "It brings an awful lot of talent into the UK which otherwise might go elsewhere. And I think from an economists' point of view I would argue that does help to boost growth. And of course finance generally does play an important role in a modern industrialised economy. And so I think it's important politicians begin to recognise what they actually have, and don't treat finance as they have other nationally important industries such as cars over the past thirty years." h The cap was approved at a time of public anger against bankers after they were bailed out in the financial crisis. Now it will be up to Europe's top courts to deteremine what they're worth.