Banks told to cut bonuses

UK banks have been told by regulators to ensure employee bonuses are kept down to reflect the industry’s recent mis-selling and rate-fixing scandals, a source confirmed last night.

Letters sent last month by the Financial Services Authority to all bank chief executives also told the institutions they should set an example and “claw back” past bonuses awarded to employees who were involved in scandals such as the abuse of the benchmark Libor interest rate.

The FSA declined to comment.