Public furor over bankers' pay seems to be abating in the United States but is still strong in Europe, which could give American banks an edge in recruiting staff around the world.

Yet it is not clear how long that advantage will last, because U.S. rulemakers are on the verge of setting their own new restrictions. The Federal Deposit Insurance Corp will release a draft of proposed rules on compensation in the financial sector on Monday.

Few analysts expect the rules to be as harsh as their European counterparts, though. The European Union in December set guidelines that top bankers be limited to receiving 20 percent of their annual bonuses upfront in cash, with some exceptions.

Banking executives on both sides of the Atlantic say more restrictive rules for European banks could help U.S. banks hire traders, salespeople, and bankers in Asia, which has become a key source for banking profits in recent years.

In Europe the pressure on bonuses is still strong. Beyond the EU's guidelines, British Prime Minister David Cameron said last month that he wanted banks to award smaller bonuses, and the government has been negotiating to push bonuses lower.

In contrast, senior executives at major U.S. banks have not received any flack for the size of their bonuses. Goldman Sachs recently paid its CEO, Lloyd Blankfein, $14.6 million in base salary and stock awards.

Barely a peep was heard on that payout, a stark contrast to the mood a year ago, when he was vilified for his bonus and made to account for himself and his firm before the U.S. Senate.

MORE CASH

American banks may have an edge if their rules allow them to defer less pay.

One of the fundamental rules of bonus season is this: the more cash a banker gets, the happier he or she is, and the less cash a banker gets, the more likely he or she is to start looking for a new job.

The issue became more important this year as banks began paying out bigger portions of the bonus pool on a deferred basis, in some case over three or four years -- with the biggest deferrals and the biggest declines in cash components coming in Europe.

If there are competitors out there that are offering larger cash components I think there will be plenty of activity with people switching firms, said one U.S.-based equity capital markets banker.

CRACKDOWN LOOMS

U.S. banks can not yet breathe a sigh of relief, though.

The Dodd-Frank law, enacted in July, requires regulators to ban pay practices that encourage inappropriate risk taking. On Monday banking agencies will release a rule to implement this section of the law.

The rule is expected to require a significant amount of executives' bonuses to be deferred over a number of years, similar to a proposal G20 leaders agreed to in 2009 where the proposed period of deferral was at least three years.

That proposal also suggested 40 to 60 percent of bonus pay be deferred.

In June, a month before Dodd-Frank became law, banking regulators led by the Federal Reserve put out guidance on pay, suggesting compensation should not cause employees to take imprudent risk and that the board of directors should be involved in policing pay. The rules released on Monday are expected to be more specific.

Some banks are already broadly in line with most of those terms, notably Morgan Stanley . For others the rules may

give them slightly less flexibility than they have now.

We are seeing and will continue to see some fundamental shifts in Wall Street compensation, and I think investment bankers are going to have to get used to some new fundamentals, said Francisco Paret, co-head of the U.S. investment banking practice at search firm Egon Zehnder and himself a former investment banker.

(Reporting by Ben Berkowitz, additional reporting by Clare Baldwin in New York and Sarah White in London; Editing by Phil Berlowitz)

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