Saturday 24 June 2017

Rogue UK bankers to lose 10-year-old bonuses

For chief executives and chairmen, a bonus could be clawed back for up to 10 years if misconduct is uncovered, the Bank of England's Prudential Regulation Authority and Britain's Financial Conduct Authority said.
For chief executives and chairmen, a bonus could be clawed back for up to 10 years if misconduct is uncovered, the Bank of England's Prudential Regulation Authority and Britain's Financial Conduct Authority said.

Huw Jones

Top bankers in Britain could have their bonuses clawed back a decade after they were awarded under proposals from regulators yesterday that would create the toughest pay curb regime in the world.

Critics said the plans meant that British banks would have to pay a premium to attract top bankers from overseas, while lawyers questioned whether they could be enforced.

For chief executives and chairmen, a bonus could be clawed back for up to 10 years if misconduct is uncovered, the Bank of England's Prudential Regulation Authority and Britain's Financial Conduct Authority said.

Senior managers face a seven-year clawback period, dropping to five years for more junior staff.

"This is a crucial step to rebuild public trust in financial services, and allows firms and regulators to build long term decision making and effective risk management into people's pay packets," FCA chief executive Martin Wheatley said.

Public anger at big bonuses awarded to bankers who were bailed out by taxpayers or found to have tried rigging Libor interest rates or currency markets sparked new curbs across the world but Britain has gone much further than other countries.

Nicholas Stretch of lawfirm CMS said it would be very difficult to make the lengthy clawback rules work in practice. Bankers may have moved to another part of the world by the time a clawback is ordered.

"As promised by the government, the UK now has the toughest bank pay rules in the world," said Jon Terry, a pay expert at consultancy PwC.

"The biggest concern for banks headquartered in the UK is the uneven playing field that now exists between the UK and the rest of the European Union, adding to the existing differences between the EU and the rest of the world," Terry said. (Reuters)

Irish Independent

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