04/16/2013 05:18 EDT | Updated 06/16/2013 05:12 EDT

European lawmakers set to adopt banker bonus cap, laws to strengthen banks' capital buffers

BRUSSELS - The European Parliament is set to vote in favour of financial reforms including legislation to cap bankers' bonuses.

The proposal will limit bonus payments at one year's base salary or double that if a large majority of a bank's shareholders agrees. The rule, which comes into force next year, will also apply to European units of foreign banks and the employees of EU banks working overseas.

Lawmakers in Strasbourg on Tuesday were expected to widely back the proposal and pass a sweeping package of financial laws that will force banks in the 27-nation European Union to strengthen their capital buffers.

The measures also lay important groundwork for a centralized banking supervisor for the eurozone, which is a cornerstone of the 17-country currency bloc's effort to tackle its debt crisis.