Review of banker bonus cap not top of the agenda, says BoE official
A review of the cap on bankers bonuses is not top of the Bank of England’s priority list, according to an official.
Now the UK is out of the EU it is free to set its own regulatory agenda on financial services. It has previously been reported the Treasury is considering scrapping the cap entirely in a bid to keep the City competitive post-Brexit.
City minister John Glen last month refused to rule out lifting the cap although said the Government would not remove the ceiling immediately as he eyes ways to overhaul City rules.
A senior Bank of England official today echoed Glen’s comments: “In the post-Brexit agenda at the moment we have other issues that we are prioritising,” Victoria Saporta, executive director of the bank’s Prudential Regulation Authority.
The Bank of England initially objected to the cap which was introduced in the wake of taxpayer bailouts of the banks during the 2008 financial crash.
The central bank said it could lead to banks increasing fixed pay and there were other ways to curb excessive pay.
Saporta today told the Treasury Committee these arguments against the cap still stood.
Regulators are under pressure to convert a number of inherited EU laws into something more flexible. Saporta said this would help the BoE simplify rules for smaller banks and make insurance capital rules “fit for purpose”.
The bank and City regulator are under pressure to push through a number of other changes in the City, including reforms to listing rules and fintech to bolster the City.
The Financial Conduct Authority’s director of markets today said the regulator had “limited bandwidth” and “we will try and do the things that we think make the most different because they need to be done quickly, and therefore everything has to fight for its place in the queue”.