The Bank of England is scrutinising allowances awarded to top staff by banks in an effort to establish whether they are a covert way of avoiding a new European Union cap on bonuses, a senior official at the central bank said on Tuesday.
Reuters reports that from next year bankers' bonuses in the 28-country EU can be no higher than fixed salary, or twice that amount if a bank's shareholders give their approval. However, HSBC, Lloyds and Barclays are all considering giving top staff monthly or quarterly allowances to boost fixed pay.
About 80% of the bankers affected by the rule are based in London.
The Bank is toughening its stance on excessive compensation in response to public and investor criticism of a bonus culture blamed for contributing to the financial crisis and has asked its supervisory arm, the Prudential Regulation Authority (PRA), to study the proposed allowances.
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