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‘Bankers are well paid’ – minister says salary cap will stay in place

‘Bankers are well paid’ – minister says salary cap will stay in place

Restrictions on banker pay imposed in response to the financial crisis will not be changed, Junior Finance Minister Michael D’Arcy has said.

“I’m of the view the decision is made,” Mr D’Arcy 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.

When asked to comment on Mr D’Arcy’s comments, the Department of Finance said the issue was still under review.

“Minister [Paschal] Donohoe is currently considering the Korn/Ferry report and is discussing the findings with Department officials.

“The minister will engage further with his Cabinet colleagues on the matter in due course,” it said in a statement.

Even if bonuses are reinstated, payments of more than €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.”

A decade after the financial crisis, banker pay is still a lightning rod – 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 Fáil.

“It would be inappropriate given we’re still awaiting the results of the investigations,” Fianna Fáil finance spokesman Michael McGrath said.

“I don’t believe it should be considered.”

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

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

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