Britain's Bank of England announces tough new rules on bankers' bonuses
August 1, 2014, 12:45 am TWN
LONDON -- British banks will be able to claw back employee bonuses up to seven years later if the recipient is found guilty of serious recklessness, the Bank of England (BOE) announced on Wednesday.
Bankers found guilty of “causing a bank to fail” can already be sentenced to prison and fined, but could now be forced to hand over their bonuses — even stocks that have already been cashed and spent.
Banks can currently defer payment of bonuses, which can be double bankers' basic annual salary, for three to five years. Under the new plans, they will also have the power to claw back cash that has been paid out.
The rules, amongst the toughest in the world, were finalized by the BOE's Prudential Regulation Authority (PRA), which is also proposing further rules to allow the clawback period to be extended beyond seven years.