Fearing that the UK’s international competitiveness will be undermined, Financial Services Authority (FSA), the UK’s financial regulator, has retreated from making specific recommendations to bankers on how they should structure bonuses to executives – reported Financial Times.
The draft version of remuneration code has warned that the final code would take into account whether there is a satisfactory alignment of implementation plans by the authorities in the major financial centres. Against this backdrop, it is facing intense criticism from industry in the wake of the financial crisis.
In the newspaper, Hector Sants, CEO of FSA, wrote: “The FSA’s new guidelines are designed to ensure that boards prevent management from introducing compensation policies that, in effect, subordinate the interests of capital providers to those of employees.”
Eventhough, FSA still wants to unveil the final remuneration code, as the US and EU are lagging behind the UK in imposing limits on bankers remuneration, it is concerned that most of the financial firms may move people out of the nation to avoid the regulation. Peter Snowdon, regulatory partner at the Norton Rose law firm, said: “There is a view in the market that all the regulators around the world are not getting on as well as the FSA would like and it appears there has been less consensus than expected,” reported the newspaper.
