Bank of England unveils bankers’ bonus clawback plan

The Bank of England has unveiled plans that mean rule-breaking bankers may have to pay back bonuses up to seven years after being awarded them.

Bankers that have been found guilty of causing a bank to fail could also be jailed for long periods.

Even if bonuses were paid in shares or have been cashed and spent, bankers could be asked to pay the money back.

The banking industry said that the new rules could put UK banks at a disadvantage compared with banks elsewhere.

Many bankers receive a considerable chunk of their pay in the form of an annual bonus, which can be up to double their basic salary.

Under current rules, that bonus is usually for a period of three to five years, during which time it can be clawed back if appropriate.

However, misconduct such as rigging interest rates can take longer to emerge, and so under the new policy, bonuses may be clawed back up to seven years later.

Those found negligent could also be jailed for up to seven years.