Minister rules out change to bankers' salary cap

Tuesday 07 May 2013 13.25
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Pat Rabbitte has ruled out the removal of the €500,000 cap on bankers' pay
Pat Rabbitte has ruled out the removal of the €500,000 cap on bankers' pay
Michael Somers said it is difficult to see where economic growth is going to come from
Michael Somers said it is difficult to see where economic growth is going to come from

Minister for Communications, Energy and Natural Resources Pat Rabbitte has ruled out the removal of the €500,000 cap on bankers' pay.

He said that the Government made no apologies for the cap.

Minister Rabbitte said that nobody would tell him a €500,000 salary is not enough to find people with the ability to do the job.

A spokesperson for the Department of Finance has said additional regulation for banks is being brought in right across the EU.

The spokesperson said Ireland is committed to implementing them.

Deputy Chairman of Allied Irish Bank Dr Michael Somers said that key people who he regards as "systemically important" to AIB are now leaving the bank.

He was speaking on RTÉ’s The Business with George Lee.

Mr Somers added that this was due to the Government cap on bankers' pay.

It is increasingly difficult to get people to join the bank, he added.

He said that AIB has had no chief financial officer for a long time over the issue of pay and that it was an extraordinary position for a major financial institution to be in.

Separately, Dr Somers said he is dismayed to see major international banks pulling out of the International Financial Services Centre in Dublin.

He said that banks such as Goldman Sachs are leaving because of heavy regulation.

The banks pulling out will not say why they are doing this publicly, but have told him privately they are leaving because of heavier financial regulation in Ireland, Dr Somers added.

Dr Somers said that he is not anxious to see AIB writing off loads of debt any time soon.

The money that would be written off is not the bank's money, he commented, but taxpayers' money that had been put into the bank by the National Pension Reserve Funds.

Dr Somers said he wants to see as much of that money as possible coming back to the pension fund on behalf of taxpayers.

He said that it is difficult to see where economic growth is going to come from.

Irish banks have a shrinking mindset and journalists are not probing them enough about the amounts they are lending to the business sector, Dr Somers added.