Bloomberg reports that the central bank’s proposed rules on bonus clawbacks would allow lenders to retrieve bonuses for up to six years after they’re paid, starting January 1st 2015, the Prudential Regulation Authority, a unit of the BOE, said in a statement Thursday.
'We won’t allow remuneration schemes to exist that encourage behavior likely to jeopardize financial stability', PRA Chief Executive Officer Andrew Bailey said. 'We have an objective to ensure the safety and soundness of the firms we regulate'.
The rules are part of measures by global regulators aimed at hitting bankers’ wallets if their risk-taking leads to large losses at a lender. The European Union published plans today to require debt used in employee bonus payments to convert into shares or be written down when a bank gets into difficulties.
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