From Arlene McCarthy MEP.

Sir, I welcome your detailed coverage of the new law regulating bankers’ bonuses that we adopted in the European parliament last week. I was concerned, however, to read Angela Knight’s comment that it was not clear who would be covered by the new law ( “Bankers unclear on effect of EU bonus cap”, July 8).

The law is clearly addressed to all staff whose activities affect the risk profile of their institution. If banks are genuinely unclear about which members of staff this means, then it seems that their risk management systems are even more woefully inadequate than the financial crisis has already shown them to be. In that case this law, which at its heart places remuneration policies firmly as part of a bank’s risk management requirements, is ever more vital.

Arlene McCarthy,

Vice Chair, Economic and Monetary Affairs Committee,

European Parliament

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