Bank of England Issues Bonus Warning

Mark Carney

Bankers are facing a fresh crackdown on bonuses ahead of the New Year pay round under moves by the Bank of England to overhaul award structures.

The telegraph reports that firms have been told to lengthen directors’ incentive periods from three years to between five and eight years. It could also be made harder to qualify for a bonus, by penalising risk, while awards will increasingly be paid in bail-in debt.

In its Financial Stability Report, the Bank stressed 'the importance of these concerns for UK banks’ current remuneration round'.

The newspaper also reports that the new Governor of the Bank of England has previously criticised the remuneration 'windfall' enjoyed by bankers and has supported plans to pay them in bonds, suggesting tougher regulations could be financed by cutting 'personnel' costs.

In statements that could hint at how he will approach bankers' pay when he starts his new role in London next summer, Carney spoke strongly of the need for banks to control their operating costs.

BoE tells banks to crack down on bonuses

Mark Carney attacked bankers' windfall pay agreements

image: © World Economic Forum

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