The cap, which was brought in as part of EU-wide efforts after the financial crisis, has long been criticised as an anti-competitive stranglehold on the capital’s competitiveness.
The bankers’ bonus cap, which limits the pay of top City and Canary
Wharf executives, could be scrapped by new Chancellor Kwasi Kwarteng.
Kwarteng wants to scrap the cap as part of efforts to revitalise the
City and give London a competitive edge over European rivals, according
to reports first in the FT and confirmed by City A.M. this evening.
Last month Liz Truss, Kwarteng’s boss and Prime Minister, said it was
time to ditch EU-era regulation in an interview with City A.M.
Truss said that the City
is a “jewel in the crown of the UK economy but for too long its
potential has been held back by onerous EU regulation, which have
stifled growth and stunted investment.”
Whilst the cap means that the UK is in line with Frankfurt and Paris
markets, City grandees have long grumbled that it has allowed New York
and Singapore to have the jump on the capital when attracting the very
top talent.
The ceiling limits bankers’ pay at twice their annual salary.
Rishi Sunak, the former Chancellor, had been expected to outline a
series of post-Brexit reforms in his Mansion House speech earlier this
year, but resigned before he could outline his proposals.
Alongside the removal of the bankers’ bonus cap, City bodies have
long pushed for reform of Solvency II regulations – which limits the
amount pension funds and insurers can invest in longer-term projects –
and MiFid 2 rules.
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