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UK to close loophole in bank bonus clawbacks

New proposals tabled by the Prudential Regulation Authority would empower new employers to impose penalties

London's Canary Wharf financial district
London's Canary Wharf financial district Photo: iStockPhoto

Bank traders and executives won’t be able to leave their past behind them under new proposals to let banks recoup ill-gotten bonuses from former staff.

Under the draft rules released on January 13, traders or bankers who are offered a buyout of unvested bonuses would have to enter a contract with their new employer allowing the pay to be clawed back if they are later found to have broken rules or taken excessive risks.

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