Bank bonus cap moves step closer

European regulators have backed tougher than expected draft rules on bankers' pay despite pressure from the UK and France to water down the restrictions.

If the draft rules are implemented, it would cap the amount of a bonus able to be taken in cash to a maximum of 30%.

The measures were passed by the Committee of European Banking Supervisors, made up of financial watchdogs from the EU's 27 members. The new rules would apply to the worldwide operations of banks and subsidiaries operating within the EU.

Jon Terry at PricewaterhouseCoopers explains what the consequences of this draft are likely to be.