Yesterday Niilo Jaaskinen, advocate general of the European Court of Justice, rejected the UK’s legal arguments against the proposal to restrict bonuses to 100% of the banker’s pay or 200% with shareholder approval.
He decided that despite the UK's arguments that the would push up basic pay, the cap is legally valid, although European Court of Justice is not bound to follow his decision.
In a letter to Bank of England governor Mark Carney, Osborne said:
“It now looks clear that there are minimal prospects of success with our legal challenge, so we will no longer pursue it.
“But that should not stop us from pursuing our objective of ensuring a system of remuneration that encourages responsibility instead of undermining it.”
