Bankers’ bonuses could be delayed for up to ten years under proposals by a commission of MPs and peers.
British bankers normally receive their bonuses either immediately or after a one, two or three year wait, but a draft report of the Parliamentary Commission on Banking Standards seen by the Financial Times suggests they should be prevented from accessing the payouts for as long as a decade.
The proposals would make it easier for boards to reclaim bonuses should businesses that appeared successful in the short-term end up backfiring in the long run. Bankers would, it is claimed, be encouraged to think about the impact of their behaviour.
The commissioners, including former Tory Chancellor Lord Lawson and Archbishop of Canterbury Justin Welby, are set to meet early next week ahead of the report’s publication. Their findings could be released as soon as Thursday.
Chancellor George Osborne set up the cross-party commission following the Libor scandal in an effort to shake-up the culture in British banks.
The report is likely to include recommendations for tough sanctions on bankers who misbehave, as well as reforms to bankers’ overall pay.
The commission is also set to recommend that the Royal Bank of Scotland should be split into a “good” bank, shorn of billions of pounds of risky loans, and a “bad” bank, it was reported earlier this week.
Advocates claim it would encourage the “good” bank to lend to Britain’s small businesses, but the Government is against the idea as it would involve nationalising the bank at great cost to the taxpayer.