LONDON (Reuters) – Britain’s government wants to make London’s financial center more competitive, initially by lifting a cap on bankers’ bonuses, Finance Minister Kwasi Kwarteng said on Friday.
This system, which limits bonuses to twice the base salary, was implemented at European Union level in order to limit excessive risk-taking after the global financial crisis of the late 2000s , which had forced the British State to bail out banks to the tune of tens of billions of pounds sterling.
However, successive British governments and the Bank of England have always criticized this ceiling, judging that it only favored the increase in basic salaries.
The United Kingdom has since left the EU without questioning this bonus framework.
“We need world-class banks to create jobs here, invest here and pay taxes here, in London, not in Paris, not in Frankfurt and not in New York,” Kwasi Kwarteng told parliament.
“All the bonus caps did was push up bankers’ base salaries or encourage certain activities to leave Europe, it never capped total compensation… As a result (…), we will get rid of it.”
Kwasi Kwarteng added that he would present an “ambitious” financial regulatory reform plan in the autumn “to reaffirm the UK’s status as a global financial services centre”.
(Reportage Huw Jones;, French version Marc Angrand, edited by Jean-Stéphane Brosse)
click here for restrictions
©2022 Reuters