London plans to scrap limits on bankers' bonuses

Kwasi Kwarteng, the UK's new Chancellor of the Exchequer, could end a rule limiting bonuses to 200% of annual salary.

Britain's new Chancellor of the Exchequer Kwasi Kwarteng, who has promised to reform the financial sector to boost the country's growth, is considering removing a limit on bankers' bonuses inherited from the European Union, according to British press. Several media quoted sources close to the Minister of the Economy on Thursday, after information revealed by the FinancialTimesensuring that Kwasi Kwarteng could put an end to a rule limiting bonuses to 200% of annual salary - which London had strongly opposed when it was put in place in 2014. Contacted by AFP, the Treasury did not not commented.

Although no official decision has been taken, Kwasi Kwarteng told officials of the powerful British financial sector last week, the day after his appointment, that he intended to implement "without the slightest embarrassment» its agenda focused on growth. The previous Conservative government of Boris Johnson had launched a reform of financial services to improve the competitiveness of the City and turn the page on the EU, planning in particular to relax the requirements in terms of capital of insurance companies or even increase the control of Parliament and the government over the regulators of the sector.

A cap that came into force in 2014 in the EU

A bill was tabled at the end of July and is currently being examined by the British Parliament. He had been criticized by NGOs or experts worried about measures going too far in deregulation, but had been applauded in particular by TheCityUK, one of the main London financial lobbies. If the executive of Boris Johnson had not touched the limits of bankers' bonuses, Kwasi Kwarteng had said he was ready last week, in a press release, to "do things differentlyof his predecessors to attract investment and grow the economy.

A cap on bankers' bonuses came into force in early 2014 in the EU despite strong opposition from the UK government. London had started an action for annulment before European justice before giving up. The structure of bankers' remuneration was considered to be one of the factors of the financial crisis of 2008-2009, as it was likely to encourage them to take excessive risks to pocket bonuses.

Kwasi Kwarteng must also translate into budgetary terms the promises of the new Prime Minister Liz Truss to freeze energy prices for households and businesses and to lower several taxes, very costly measures which will be financed by borrowing. A budget announcement is scheduled for the end of next week, according to the British press, but has not been officially confirmed by the Treasury.

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