Leading London financiers now expect the U.K. to rewrite European Union restrictions on banker bonuses as a way to attract talent after Brexit.
The nation is beginning to embrace the freedom to set its own policies outside the EU and is no longer consumed by efforts to ensure British regulation comports with those of the 27-member bloc, Bruce Carnegie-Brown, chairman of Lloyd’s of London, said Tuesday in an interview with Bloomberg journalists in New York. A limit on banker bonuses relative to base salaries is among the EU’s most prominent curbs on the financial industry.
One of the things that most spooked them about London becoming more competitively attractive for talent was our willingness to change that, Carnegie-Brown said of the EU. It’s now time to make it easier for people to be compensated in the way that you’d expect, he said.
Still, that doesn’t mean U.K. regulators will be turning a blind eye. The Prudential Regulation Authority has challenged banks to justify compensation packages and pushed back against some decisions to reward top earners deemed to have engaged in excessive risk-taking related to last year’s collapse of Archegos Capital Management, Bloomberg reported earlier Tuesday.
The EU pay restrictions forced U.S. banks to implement different compensation models in New York and Europe, complicating their operations, Carnegie-Brown said.
We haven’t changed that rule in the U.K. — yet, Carnegie-Brown said, adding that he expects a change will happen.
Carnegie-Brown was visiting the U.S. along with two of the top lobbyists for Britain’s financial sector — Catherine McGuinness, policy chair of the City of London Corp., and Miles Celic, chief executive officer of TheCityUK.
