Banks talk a good talk about deferring bonuses, but the reality is that a significant proportion of bonus money will often be made available in the same year that bonuses are awarded. Take Morgan Stanley, which is deferring bonuses for its high earners – but still making 40% of the deferred amount available before the end of 2013.
If the Bank of England had its way, the situation would be very different. Andy Haldane, executive director for financial stability at the Bank of England, said today that bonuses should be deferred for five to ten years, in line with the credit cycle. “We had roughly a twenty-year boom in the run-up to this crisis, so measuring performance only over a three or five-year window is far too short,” he added.
This isn’t the first time that Haldane has called for longer deferrals: he suggested five to ten year deferrals for bankers’ bonuses back in April 2012. And November’s Financial Stability Report from the Bank of England suggested that if bonuses were to be deferred in line with the credit cycle, bankers should be compelled to wait anything from eight to thirty years.
Fortunately, there’s no indication yet that banks are planning to take Haldane up on his proposal. Deutsche Bank, HSBC and Nomura currently have some of the longest deferrals, at five years. For the moment, ten years would be a big departure from the norm.
100 Barclays staff linked to Libor rigging may be named later this week. (Telegraph)
“The fact that someone is named in hundreds of thousands of pages of documents following a wide-ranging three-year investigation in which no stone was left unturned does not necessarily mean that person was involved in any wrongdoing,” Barclays added. (Financial Times)
Peter Rading, who oversaw the rates business at RBS has resigned for “personal reasons”. This has nothing to do with Libor. (Telegraph)
Is the division of RBS’s investment bank just a prelude to its sale? (Reuters)
Isabelle Sellier, head of JPMorgan France, is moving to London. Kyril Courboin, a JPMorgan banker in London is moving back to Paris to head JPMorgan in France. (Financial News)
High frequency trading company Virtu is closing its London office and moving all its staff to Dublin. (Financial News)
Jamie Dimon and Anshu Jain want banks to be allowed fail. (Bloomberg)
Casual drink with acquaintance actually first move In elaborate chess game to get hired. (The Onion)