Regulation

UK to close loophole in bank bonus clawbacks

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

Wednesday 13 January 2016 at 07:22

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.