Rules introduced after the 2008 crisis currently require banks to delay bonuses for between three and five years, the FT reports.
But Andy Haldane, the Bank of England’s financial stability director, told the Banking Standards Commission that tougher standards were required.
“Three to five years is far too short to capture the cycle in credit,” he said. “We had roughly a 20-year boom in the run-up to this crisis, so measuring performance only over a three or five-year window is far too short.
“I prefer the HSBC model where you are locked in until resignation or retirement. It gets you as close as possible to the old partnership model.”
Haldane also told the Commission – the Parliamentary group tasked with improving banking standards – that more random tests were required to prevent mis-selling to consumers.
