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