Bank of England Proposes Changes to Banker Bonuses

The Bank of England (BoE) and the Financial Conduct Authority (FCA) have proposed relaxing bonus regulations for UK bankers, allowing for faster access to payouts. Under new plans, senior bankers would see their bonus deferral period reduced from eight years to five, while less senior staff would have a four-year wait. Part payment of bonuses would now be permissible from the first year instead of the third, signaling a shift towards encouraging risk-taking and supporting economic growth, as urged by UK finance minister Rachel Reeves. Despite these changes, the BoE emphasized the need to maintain accountability for risk management failures and avoid reverting to pre-2008 pay structures. The proposals are open for consultation until March 13, indicating a shift in regulatory approach to align with international standards and enhance competitiveness in the financial sector.