Bank bonuses rules have new formula

The Financial Services Authority announced that the EU rules and the new formula for disbursing bank bonuses agreed upon last week will be brought to bear on over 2,500 financial institutions in the UK.

Many rules created by the Committee of European Banking Supervisors (CEBS) will not apply to firms in the last two levels of the outline for four levels of businesses found in the code. These kinds of firms include building societies, smaller banks, and companies that lack balance sheet risks.

The FSA explained that having a remuneration committee based in the UK is one of the most important of these rules. Likewise, the ratio of non-static remuneration paid by shares and deferral fall into this category. “As for additional rules, they will be applied at our discretion.”