In return for cooperation on Greek debt, banks said to be expecting EU concessions on compensation
Last week, Mercer produced some research suggesting banks in Europe are at a disadvantage when it comes to pay.
Not only are banks in Europe obliged to defer a higher proportion of their bonuses, but they must do so for longer than banks in the US. To make matters worse, the EU has indicated that bonuses remain "unjustifiable" and that it might like to tighten the rules even further.
However, senior bankers are said to be hoping this will all be forgotten if they agree to voluntarily rollover Greek debt in a manner the European authorities would deem appropriate.
"A lot of people are saying that regulators will need to be less stringent about bonuses if banks cover Greek bonds in the way they're being asked to," says the head of one debt-focused headhunting boutique. "If that happens, there will be a more level playing field between Europe and the rest of the world in terms of compensation."
French and German banks are the biggest holders of Greek debt. The Financial Times said yesterday that politicians are pushing for €30bn of Greece's €100bn debt to be rolled over. This rollover has to be voluntary in order to prevent the ratings agencies from downgrading the debt to default status and triggering a deepening of the crisis.
The voluntary nature of banks' participation is - arguably - giving them bargaining power.
However, translating into compensation concessions will probably prove difficult.
"There's still a lot of political pressure against bank bonuses. I can't see the public agreeing to any material leniency, and ultimately the governments involved in these negotiations are politicians," says Jon Terry, head of compensation at PricewaterhouseCoopers.
