Bonus compromise masks Basel cheese

The European Parliament has probably won a Pyrrhic victory with its position on bank bonuses. In return, EU member states got what they wanted with Europe’s implementation of Basel III: no binding leverage ratio; mortgage risk weightings and capital add-ons to be determined by member states and no obligatory consolidated capital position for bank-insurance companies. In other words, Banking Union will start out with capital rules that are more like Emmental cheese than a single rulebook. No wonder it is causing such a stir in the Basel Committee.