Ministers are reportedly considering removing caps on bankers’ bonuses, in a bid to make the City a more atttractive business hub post-Brexit.
The preliminary plans to remove all existing restrictions and EU rules are in their initial stages and are yet to be part of any public consultations, The Times reports.
Ministers are reportedly wary that ditching the current rules could spark a public backlash, as the 2008 financial crisis remains very much unforgotten.
Within the Treasury, the idea is touted as a way to make London a more competitive location for senior bankers than alternative financial centres in Frankfurt, Paris or Dublin – cementing London’s role as a leading hub for financial services.
Ditching the current cap on bonuses would be a symbolic move post-Brexit, as the UK forges its own path with separate business rules from the rest of the EU.
It would also win favour amongst prominent Conservative party members and donors – especially Eurosceptics who viewed the initial imposition of bankers’ bonuses as a targeted quashing of rewards within British companies.
The bonus cap was introduced in January 2014 and was part of a reaction to the financial crisis of 2008 when many bankers received multi-million rewards despite huge losses within a bank. Currently, payouts are restricted to 100 per cent of salary or 200 per cent, with approval from shareholders.