- MarketPulse - https://www.marketpulse.com -

Bank of England Preempts Bank Bonuses with Warning

Bankers’ pay needs to be curbed further to reflect the risk of a bank failure many years after a bonus has been awarded, the Bank of England (BoE) said before the annual bonus season begins next month.

The European Union has already introduced curbs on bankers’ bonuses after huge payouts were criticized for helping to create the climate that led to the financial crisis in 2008. Bank shareholders, too, expressed dismay at large bonuses for bank employees despite poor returns.

Measures taken so far include the requirement for a portion of bonuses to be paid in shares over several years, but the BoE’s Financial Policy Committee (FPC) believes that these do not go far enough.

Chunks of a bonus are typically deferred for only three years. The FPC, which takes over British bank regulation next year, said that this is not sufficient to deter bankers from taking risky decisions that can have an adverse impact many years later.

via Reuters [1]

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza