Bankers can earn unlimited bonuses again from Tuesday, following a change to rules brought in following the financial crisis.
Before 2008 City high-flyers hit the headlines for spending their bonuses on fast cars and champagne-fuelled nights.
The TUC warns removing the cap will bring back a “greed is good” culture.
The TUC warns removing the cap will bring back a “greed is good” culture.
Ruksana Uddin, from City recruitment firm Robert Half, said she expects banks to start the process of bringing back bigger bonuses over the next few months.
“It will probably be at least a year before things start filtering through,” she said. “Bankers going out, spending their money and doing those lavish things – we probably will not see that until 2025.”
The cap was brought in across the European Union in 2014, limiting bonuses to a maximum of two times a banker’s basic salary.
The aim was to make the financial system more stable by reducing the incentive for bankers to take excessive risks.
But regulators and banks said it had not had the intended effect because firms simply switched to paying higher basic salaries to compensate for lower bonuses. Higher basic salaries are harder to reduce during a downturn, or take back if performance has been poor.
Bankers can earn unlimited bonuses again from Tuesday, following a change to rules brought in following the financial crisis.
The TUC warns removing the cap will bring back a “greed is good” culture.
Before 2008 City high-flyers hit the headlines for spending their bonuses on fast cars and champagne-fuelled nights.
Ruksana Uddin, from City recruitment firm Robert Half, said she expects banks to start the process of bringing back bigger bonuses over the next few months.
The TUC warns removing the cap will bring back a “greed is good” culture.
The TUC warns removing the cap will bring back a “greed is good” culture.
Ruksana Uddin, from City recruitment firm Robert Half, said she expects banks to start the process of bringing back bigger bonuses over the next few months.
“It will probably be at least a year before things start filtering through,” she said. “Bankers going out, spending their money and doing those lavish things – we probably will not see that until 2025.”
The cap was brought in across the European Union in 2014, limiting bonuses to a maximum of two times a banker’s basic salary.
The aim was to make the financial system more stable by reducing the incentive for bankers to take excessive risks.
But regulators and banks said it had not had the intended effect because firms simply switched to paying higher basic salaries to compensate for lower bonuses. Higher basic salaries are harder to reduce during a downturn, or take back if performance has been poor.
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