ERS are warning politicians and regulators they risk an exodus of talent from London if they put further curbs on pay in response to rising bonus levels.
New ONS figures show financial sector bonuses in the five-month period between December and April in the last financial year were £10bn, up from £8bn in 2008. The figures come after RBS, HSBC and Barclays announced they had set aside a combined £5bn for pay and bonuses in their investment banking operations for the first six months of the year.
Angela Knight, chief executive of the British Bankers’ Association, is warning against a knee-jerk reaction by politicians to the headline figures.
“British bank staff already find their pay more closely monitored and controlled than in any other major banking centre. Our banks work under tight rules set by the Financial Services Authority and it should also be remembered individuals pay tax on everything they earn,” she said.
Knight fears that further restrictions on pay will harm London’s ability to keep hold of its top talent.
“Those people who get the big bonuses are part of a tiny, highly mobile group who are liable to move elsewhere,” she warned.