The investment bank Goldman Sachs has become the first to remove its cap on bankers’ bonuses following changes to UK laws introduced last year.
The bank said this would give “greater flexibility” and was closer to what happens in other big financial centres such as Singapore and New York.
Bonuses were limited to twice basic pay in a move introduced by the EU in 2014.
Bonuses were limited to twice basic pay in a move introduced by the EU in 2014.
The limit on bankers’ bonuses was introduced by the EU in 2014 despite British opposition, to try to discourage the kind of excessive risk-taking that contributed to the 2008 great financial crisis.
Critics argued that banks were able to get round it by simply increasing base salaries. This then made it harder to reduce salaries when bankers performed badly, or claw back pay if misconduct came to light.
When it brought in the changes, the Financial Conduct Authority said the change should remove these “unintended consequences”.
The decision was first announced by Kwasi Kwarteng during his brief stint as chancellor in 2022, in a bid to boost the competitiveness of London as a financial centre.
Banks have argued that the bonus cap makes it harder to attract talent from the US and Asia to the UK.
The investment bank Goldman Sachs has become the first to remove its cap on bankers’ bonuses following changes to UK laws introduced last year.
Bonuses were limited to twice basic pay in a move introduced by the EU in 2014.
The bank said this would give “greater flexibility” and was closer to what happens in other big financial centres such as Singapore and New York.
The limit on bankers’ bonuses was introduced by the EU in 2014 despite British opposition, to try to discourage the kind of excessive risk-taking that contributed to the 2008 great financial crisis.
Bonuses were limited to twice basic pay in a move introduced by the EU in 2014.
Bonuses were limited to twice basic pay in a move introduced by the EU in 2014.
The limit on bankers’ bonuses was introduced by the EU in 2014 despite British opposition, to try to discourage the kind of excessive risk-taking that contributed to the 2008 great financial crisis.
Critics argued that banks were able to get round it by simply increasing base salaries. This then made it harder to reduce salaries when bankers performed badly, or claw back pay if misconduct came to light.
When it brought in the changes, the Financial Conduct Authority said the change should remove these “unintended consequences”.
The decision was first announced by Kwasi Kwarteng during his brief stint as chancellor in 2022, in a bid to boost the competitiveness of London as a financial centre.
Banks have argued that the bonus cap makes it harder to attract talent from the US and Asia to the UK.
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