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Daily digit: Banks slash cash bonuses

Wednesday, Jan 02, 2013 - 01:45

Jan.02 - Bankers bonuses are likely to be down 30 percent as European banks limit the cash portion of this year's staff bonuses as rocky markets, tighter capital rules and costly scandals take their toll. Hayley Platt reports.

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30% is today's daily digit in Europe - the amount bank bonuses are expected to fall by in 2013. The drop is being linked to huge fines being paid by a number of Europe's biggest banks for various financial scandals. Swiss bank UBS was one of the worst hit - it was fined $1.5 billion for fraud and bribery relating to Libor regulation. That was also a problem for Barclays - which will pay 450 million dollars. David Buik is markets strategist at Cantor Index. SOUNDBITE: David Buik, markets strategist, Cantor Index, saying (English): "Bonuses are down for a number of reasons. That the culture has changed, that the level of remuneration has been cut quite substantially, voluntarily. Obviously public opinion pressure has brought this to bear. There is also a possibility because of the manipulation of Libor and substandard behaviour that some bonuses will be clawed back from certain individuals." Banks are under increasing pressure to slash the cash paid to their staff. Politicians, regulators and shareholders believe they should be seen to suffer as many others are due to austerity measures. It's not the first time bonuses have been cut. Last year Barclays capped cash awards at $105,000. Many this year are expected to be made up of shares and other risky assets instead of hard currency. That's not necessarily bad news for bankers as some assets could do well but it does mean no immediate reward for services rendered. And that means less cash filtering into the economy - at a time when many European countries are desperate for people to spend.

Daily digit: Banks slash cash bonuses

Wednesday, Jan 02, 2013 - 01:45

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