UK regulators to consult public on scrapping banker bonus cap
By Huw Jones
LONDON (Reuters) – The Bank of England (BoE) and Financial Conduct Authority will hold a public consultation soon on the government’s proposal to scrap a cap on banker bonuses inherited from the European Union, a government source and the BoE said on Monday.
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“We and the Financial Conduct Authority will consult in the autumn,” a spokesperson for the BoE’s Prudential Regulation Authority (PRA) said.
Finance minister Kwasi Kwarteng said on Friday that Britain would scrap the cap, which limits bonuses to twice basic salary, with shareholder approval, as part of an ambitious deregulation of London’s financial industry to boost growth.
Although the outcome of the consultation appears to be clear given the government’s determination to end the cap, the PRA declined to say if it could be scrapped in time for the next bonus season, due in early 2023 when performance related pay for 2022 will be handed out.
The BoE and Britain have opposed the cap since its introduction in 2014, arguing it forces banks to bump up basic pay, making it harder to cut costs in downturns.
But the move has triggered some anger as millions of Britons are struggle to pay rocketing energy and other bills in a cost of living crisis.
(Reporting by Huw Jones; Editing by Mark Potter)