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Top UK bankers will be able to collect their bonuses sooner thanks to proposals from regulators as they move to relax rules for the post-Brexit financial sector.
Under the plans, senior bankers will see the deferral period for bonus payments reduced from eight to five years.
Bankers will also be able to receive part of their bonus during the first year instead of having to wait three years.
The proposals, from the Bank of England’s regulatory arm, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), come amid pressure on regulators to reduce bureaucracy and support risk-taking to boost economic growth.
Bonuses are often deferred, meaning they are paid in the future, rather than immediately, and can be canceled if business performance changes.
Shortening the deferral period – which for lower-level bankers would be reduced to four years – means people can receive the cash faster.
Bonus Bonanza: Senior bankers will see bonus deferral period reduced from eight to five years
Regulators said this change would make the UK a more attractive place to work, because current deferral periods are typically longer than in other countries.
Sam Woods, chief executive of the PRA, said: “These proposals on bankers’ bonuses will support UK growth and competitiveness without undermining financial stability.”
“These proposals will reduce bureaucracy and support responsible risk-taking.”
The latest plans follow last year’s decision to remove the cap on bonus payments for the City’s top bankers, which was previously capped at double the fixed salary level.
The PRA and FCA also propose removing some of the criteria that mean bankers must be identified as material risk takers (MRT), meaning their work has a material impact on the bank’s risk level.
Regulators said current criteria mean some may be misclassified as MRT and unnecessarily subject to wage restrictions.
Harvey Knight, head of the UK financial services regulatory team at law firm Withers, said it was “an encouraging development that the long-lasting impact of the financial crisis of around 15 years ago is finally being reduced”.
Simon Youel, head of policy and advocacy at campaign group Positive Money, said: “It seems an odd time for the Bank of England to loosen restrictions on bankers’ bonuses, given the governor’s recent warnings about the risks of complacency. since the last financial crisis. .’
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