The Committee of European Banking Supervisors (CEBS) ruled last year that only 20–30% of bonuses can be paid in cash upfront, and under the Basel III rules, any banker working for an international bank must be rated on a ‘scorecard’ by their employer to justify their bonus.
The regulations are not obligatory for member nations, although the Financial Services Authority and its equivalent in other countries agreed to their implementation, which took effect on from 1st January.
Tony Manwaring, CEO of think tank Tomorrow’s Company, said regulations over bonuses were a step forward but would not necessarily work in iscolation:
"For the UK, the litmus test of these reforms must be the sustainable future success of the City," Manwaring said. "From this perspective, they are part of, but not the whole solution. On their own could even damage the UK economy."
The changes come at a time of reported confidence in the UK economy during 2011 among City workers.
Almost half of bankers and financial professionals say they are more positive about the year ahead than they had been at the start of 2010 in a survey by website efinancialcareers.com.
41% of those surveyed said they thought their organisations would increase headcount in 2011.
James Bennett, from efinancialcareers.com, said: "There’s undoubtedly a spring in the heels of City professionals again and given the lynch-pin role the financial sector plays in the wider UK economy, this should be viewed as an encouraging signal — but inevitably it will take time for the benefits of an uplift in the City to touch the wider economy."
A consultancy over the regulations ends on the 25th February.
