The next frontier

17 November 2014 By Dominic Elliott

BoE Governor Mark Carney says we may need global rules to “put fixed pay at risk.” The context is Europe’s bonus cap, which is pushing up bank salaries. Carney thinks a U.S. idea of paying partly in bonds could apply to base compensation. It’s logical – if tricky to implement.

This content is for Subscribers only

To access full Breakingviews.com content you must be a subscriber. Please use the following link to request a trial.

Context News

Bank of England Governor Mark Carney said on Nov. 17 that new rules to control the fixed pay of bankers may be needed to ensure individuals can be held responsible for excessive risk-taking and misconduct.

In a speech in Singapore, Carney put forward the proposal as a way to counter a potential “undesirable” side effect of the European Union’s bonus cap, which he fears may make it harder for bankers’ pay to be “cut back.”

The BoE governor said a recent suggestion by New York Federal Reserve President Bill Dudley to pay certain staff in so-called “performance bonds” was “worthy of investigation as a potentially elegant solution.”

Email a friend

Please complete the form below.

Required fields *