The European Union's (EU's) move to cap bankers' bonuses could see those earning more than €500,000 to get significant pay rises, according to Martin Wheatley.
The chief executive of the Financial Conduct Authority (FCA) said the plan to limit bonuses could have a perverse effect which could see salaries doubled.
Wheatley said the last time regulators attempted to restrict bonuses, pay of middle-ranking bank staff had gone up “by 100% and the same thing will happen again”.
The Guardian reports Wheatley told a conference that an attempt to cap bonuses at 100% of salary for anyone earning above €500,000 (£420,000) could make it difficult to ‘punish’ bankers by clawing back payments when things go wrong.
The EU has provisionally agreed to cap bonuses at one times salary – or double that with shareholder approval, the report said. The exact details of the plan are set to be published shortly.
