The Bank of England has launched the first of a raft of consultations: this time on the banker bonus cap.
Plans to scrap the EU cap were first announced during the September mini-budget, paving the way for bankers to earn more than 200% of their salaries in bonuses.
However, recruiters and bankers are sceptical that it will spark much change here in the UK – where bankers have grown accustomed to higher fixed pay, which by and large rose to compensate for the bonus cap which came into force in 2014.
The Bank of England said as part of the consultation: “The proposed changes should…help remove unintended consequences that have arisen as a result of the bonus cap, namely growth in the proportion of the fixed component of total remuneration, which reduces firms’ ability to adjust costs to absorb losses in a downturn.”
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