LONDON, March 11 (Reuters) - The Bank of England is looking at allowances awarded to top staff by banks to see if they are a covert way of avoiding a new European Union cap on bank bonuses, a senior BoE official said.
From next year, bankers’ bonuses in the 28-country bloc can be no higher than fixed salary or twice that amount with shareholder approval.
HSBC, Lloyds and Barclays are all considering giving top staff monthly or quarterly allowances to boost fixed pay to soften the cap’s impact.
The BoE’s Prudential Regulation Authority supervises banks in Britain and its director of prudential policy Katharine Braddick said the PRA was now studying these payments.
“We haven’t looked at role based allowances in enough detail to be able to give a house view on whether they comply or not. Our job is to work with the European authorities,” Braddick told reporters on the sidelines of a financial conference.
The PRA is going to have to gauge whether the role based allowances are what they say they are or whether they are covert means to skirt the bonus cap, Braddick said.
On Thursday the BoE will publish a consultation on a proposed rule to allowing for the clawing back of paid-out bonuses at any time for up to six years, known as vested bonuses, Braddick said.