City bonuses will this year be clawed back more than ever before after the series of scandals that have hit the major banks.
Jon Terry, global head of financial services HR at accountant PricewaterhouseCoopers, said share awards made in previous years would be lower this year.
‘In previous years we had the PPI mis-selling scandal, which involved a fairly small number of banks,’ he said. ‘With the Libor-fixing scandal there have been a greater number of banks involved and it is not just UK banks.’
Royal Bank of Scotland, which is expected to be fined about £350million for its role in Libor fixing, is poised to claw back money from those of its staff who were involved.
Regulators are also more focused, meaning that banks will have to show they have clawed back awards, Terry added.
The City bonus season will kick off later this month when Goldman Sachs announces its awards for 2012. Bonuses are expected to be sharply down on previous years, with an estimated £2billion to be paid out to staff based in London.
European banks are likely to slash bonuses by up to 40 per cent, while US banks could increase payments in some cases by up to 15 per cent, according to PwC.
The full details of the clawbacks may not be disclosed. Only those involving board members would have to be revealed.
Terry said: ‘Some banks will think it is right to be transparent. I am doubtful they will put numbers on it. There is no requirement from the regulator to disclose for staff below board level.’
– The Financial Services Authority will later this month set out proposals to sweep away restrictions that prevent new banks from starting up, it is understood. Capital requirements for new banks may be reduced.
Distributed by RINF Alternative News