LONDON, March 4 (Reuters) - Britain could face legal action if it fails to implement the European Union's new rules on capping banker bonuses as set out in new draft guidelines published on Wednesday.
The European Banking Authority (EBA), the bloc's watchdog, spelled out in detail how the cap, which came into force last year and limits bonuses to no more than twice fixed salary, should be applied.
Existing guidelines on remuneration date back to 2010, before the EU passed a law to cap bonuses amid public anger over huge handouts at banks that were rescued by taxpayers during the 2007-09 financial crisis.
Most of the bankers hit by the cap are based in London and the EBA said in October that "allowances" paid by banks to boost fixed pay, and hence soften the bonus cap, breach EU rules.
The revised 119-page guidelines put out to public consultation, will come into force by the end of this year, meaning that Britain and other EU states will have to apply them to bonuses paid in early 2016, or explain publicly why not.
If the EBA feels an explanation not to comply is without merit, it could "name and shame" the national regulator, and even take the member state to the bloc's top court, which has powers to levy fines.
(Reporting by Huw Jones, editing by Carolyn Cohn)