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Will EU bonus cap 'damage economy'?

Bankers in the European Union could, for the first time, face a legal cap on bonuses from next year following an agreement reached in Brussels.

The deal, negotiated by EU parliamentarians and officials, is part of a wider package of measures designed to prevent another banking crisis.

Under the proposals, bonuses would be capped at no more than a year's salary. EU member states will now consider the measure before it can come into force, but Britain, home to Europe's largest financial sector, has previously rejected a cap on bonuses.

Alexandra Beidas, employee incentives lawyer at Linklaters, told Today business presenter Simon Jack that, "the vote is due in May and if it goes though then it will come into law in June" whether Britain likes it or not.

"It's a massive deal... there had been hope that this would be watered down considerably... that hasn't happened," she explained.

First broadcast on BBC Radio 4's Today programme on Thursday 28 February 2013.