The UK may face action from EU watchdog the European Banking Authority (EBA) if it does not cap banker bonuses in line with new proposed rules.
An EBA cap, which was not legally binding but which the watchdog expected to be adhered to, came into effect in October and limited bonuses to no more than twice fixed salary.
Now the EU wants to formalise the cap, with fixed rules by the end of 2015.
All EU states will then have to apply them to bonuses paid from early 2016.
If there is any failure to comply then the offending nation will be asked to explain itself, and if the explanation is felt to be without merit then the EBA could name and shame the national regulator.
Further sanctions would allow it to take a member state to the EU's top court, which would then have the power to issue fines.
Last October, the EBA said that most bankers affected by the bonus cap were London-based, and the watchdog said last winter that "allowances" paid by banks as a means to increase pay, and work around the bonus cap, breached its guidance.
The proposed new EU rules do not suggest major changes to the EBA's non-binding guidance from last winter.
But the watchdog would like to exempt staff at smaller banks, mainly in mainland Europe, from having to defer a portion of their bonus over several years.
The EBA and EU have opened a three month consultation period on formalising these draft rules, which ends on 4 June.