The FSA's new chairman, Lord Turner, said the FSA would not regulate how much bonuses were paid, but banks would have to explain their bonus structures.
Turner also suggested that banks found to encourage risky actions could be compelled to hold more capital to raise their costs.
Commenting on the announcement, Ronnie Fox, specialist in employment law at Fox Solicitors, said: "In the financial-services sector salaries tend to be modest. Often bonuses form a high proportion of total compensation. Bonuses reward good performance and are usually proportionate to the amount of profit generated.
"Labour [party] politicos seem not to understand that business success and the generation of profit involves taking risks," he added. "Who is to decide if risk is ‘excessive'? It is impossible to achieve business success without taking risks."
Banks may be penalised for rewarding excessive risk-raking
The Financial Services Authority (FSA) may penalise banks that pay staff bonuses that encourage excessive risk-taking.
