That's a good question because, as currently drafted, the tax legislation currently being drawn up by the UK government will cover a number of other firms not strictly regarded as banks.
And, according to The Daily Telegraph, some firms are already making noises that they are not technically banks, and therefore outside the scope of the bank bonus tax. The likes of Greenhill & Co, and Lazard and Rothschild are said to have highlighted the fact that they are M&A firms, with very little in the way of trading or lending businesses. These firms, and others like them, feel that they shouldn't be subject to the tax.
'But where do you draw the line', one banker asked, 'Are asset management firms or private banks exempt ? If so, in the large organisations like JPMorgan you'll get investment bankers taxed, yet private bankers and those working in asset management will retain their bonuses. It looks like a recipe for disaster to me'.
In the meantime, The Times reports that the UK Treasury had hoped to include guaranteed bonuses in the net, but had to forget this idea after receiving legal advice that the move could infringe employee rights under the Human Rights Act. Another banker told Here Is The City: 'The irony in all this is that Lehman Brothers is perhaps the firm most associated with the financial crisis, and yet the majority of the firm's UK-based bankers are now at Nomura International, happily sitting on 2-year bonus guarantees, which fall outside the scope of the bank bonus tax. You have to laugh'.
When asked to comment on the bank bonus tax, our own Highly-Placed Professional said: 'It beats spending two days in jail in Tunis (but only just)'.
In other bonus news, one insider tells Here Is The City that bankers at Commerzbank won't have to worry about the bonus tax, as the firm has told employees that it doesn't plan to pay bonuses in 2009 anyway. And finally, The Financial Times reports that UBS's wealth management unit has unveiled a new compensation structure for financial advisors, which is designed to keep top performers on board.
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