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Global banks warned to rein in bonuses

Nov 15 2012 07:11 Reuters

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London - Britain's top banking supervisor has warned banks operating in the country to claw back staff bonuses this year to reflect the damage caused to the sector by high-profile scandals in the past 12 months, the Financial Times reported on Thursday.

Andrew Bailey, head of the FSA's prudential business unit, wrote to bank chief executives in October warning them that it would be looking for evidence they had "clawed back" deferred bonuses from people involved in scandals.

The newspaper did not disclose the names of any banks that had received Bailey's letter.

Britain's banks have been rocked by a series of scandals including interest rate rigging, breaches of anti-money laundering requirements and the mis-selling of loan insurance and complicated interest rate hedging products.

Bailey also urged banks in his letter, sent to British and global institutions with a presence in the country, to consider firm-wide bonus reductions to account for the impact of the scandals, the FT said.

"Ex-post risk adjustment will be a major area of focus in our 2012 review of the firm's remuneration policies. Firms should also forfeit or reduce current year's bonuses if appropriate," the FT said, citing Bailey's letter.


bonuses  |  banks
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