According to the new proposal, bankers could be forced to pay back their bonuses up to seven years from the date of payment if they break financial conduct rules.
Earlier in March, the BoE had suggested to set the clawback period at six years from the time of receiving the payment.
Currently, bonuses are paid out over a period of three to five years, and it could be clawed back if appropriate. Depending on seniority, the bank today said deferred portion of bonus payment should be made at least in five or seven years.
The consultation on new rules will close on October and it will come into force on
"Clawback is most appropriate in cases where the individual has some responsibility or culpability for the circumstances giving rise to the grounds for action," PRA said. The central bank thus, "narrowed the grounds to exclude a material downturn in financial performance."
The announcement came after
"As these new rules are amongst toughest in world, we need to be careful we don't create uncertainty which might make it increasingly hard to attract talent to
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