Financial Services Authority waters down banking bonus reforms

Banking bonus reforms due to be published by the financial watchdog today are expected to be watered down, according to newspaper reports.

The Financial Services Authority (FSA) launched a consultation in February looking at measures to discourage excessive risk-taking and to crack down on huge bonuses linked to individual’s performance regardless of the bank’s success.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today and OHW+ - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Name

This field is for validation purposes and should be left unchanged.

Δ

But sources close to the FSA have said the proposal that two-thirds of bank bonuses should be deferred, so that they were only paid out for long-term success, is unlikely to be included. Nor will bonuses be linked to overall performance instead of individuals or departments, according to the Financial Times.

Writing in the newspaper, the FSA warned they could lead to the UK losing its most talented bankers to the US and Europe, where such stringent regulation is not planned. Chief executive Hector Sants said: “Such an approach cannot work if it is only applied in the UK.”