The European Parliament is likely to ban bankers’ bonuses that exceed salaries, after the EU banking regulator found inconsistencies in the calculation between rewards and risk-taking.

“We are looking at a set limit” on the size of bonuses compared with fixed salary, Othmar Karas, who is leading the European Parliament’s work on the new rules, said this week during a meeting of the Economic and Monetary Affairs Committee. This limit should be set at “100 per cent, so one-to-one.”

His comments came as the European Banking Authority (EBA) issued a report laying out the results of a survey that points the finger at the “underdeveloped techniques” that banks use to calculate employee bonuses, which are not aligned with the risks they take.

Such policies undermine efforts by regulators to improve pay practices, and harm efforts to reduce the risk of another financial crisis, the banking regulator said.

Huge disparities in bonus sizes were found across Europe, and there were big gaps in the enforcement of rules that limit the up-front cash portion of a bonus to 25 per cent of the total.

“Further supervisory guidance is needed in setting up the criteria for identifying risk-takers,” said the industry’s supervisor, as differences can lead to regulatory arbitrage and competitive disadvantages.

Karas, an Austrian MEP, reportedly said he is seeking a compromise on the draft law. He had previously suggested finance workers’ bonuses be capped at twice their base pay.

Some bankers are receiving bonuses about 10 times larger than their base salary, according to the EBA survey. The ratios of variable to fixed pay that banks have set in their remuneration policies do not signal a breach with practices from the past and “tend to be high”.

Moreover, “the criteria by which institutions decide on the ratios in practice are not always clear”,” the EU regulator added.

Michel Barnier, the EU financial services commissioner who wrote the draft law in discussion with the Parliament, has already signalled his backing for a ratio between fixed salary and bonus, but others wanted to go further.

Belgian Green MEP Philippe Lamberts said a few weeks ago there was no evidence that salary structures seen at institutions like Deutsche Bank or Société Générale “correspond to any real value creation”.

“Variable salary cannot be bigger than fixed salary,” he added. “Don’t tell me you need two-fold, three-fold, five-fold variable salary to do good work. This is false,” Lamberts said.