Top banker says industry may face lower pay

Pile Of Coins

'In the new world, pay.... may well have further to adjust'.

Sir Jon Cunliffe says shareholders have lost out as falling profitability at banks has failed to translate into lower pay packets

The Telegraph reports that banks will have to cut pay in response to lower profits, a senior policymaker at the Bank of England has said.

Cunliffe, the Bank's deputy governor for financial stability, told an audience in London that new rules requiring banks to hold extra funds in reserve had meant reduced returns to shareholders, but that this had not fed in to pay.

'The sluggish adjustment in pay (since the crisis) may well reflect the expectation that returns in banking are set to increase in the future,' he said.

'There are good reasons why they may do so. But, given lower levels of leverage, it is unlikely that we will see, or want to see again, the returns on equity that we saw before the crisis. In the new world, paybills may well have further to adjust.'

Hit the link below to access the complete Telegraph article:

Bank of England tells bankers to get used to lower pay

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