By Phoebe Seers
LONDON (Reuters) -The Bank of England on Wednesday said senior bankers in Britain would receive their bonuses earlier than previously thought, after confirming a new regime that softens post-financial crisis rules and aims to boost UK competitiveness.
The financial regulator has shortened the time that senior bankers must wait for their full amount of bonus to four years from eight. The BoE had previously recommended a cut to five years for some in a consultation.
The BoE’s Prudential Regulation Authority’s (PRA) new rules will also allow vesting of some banker bonuses on a pro-rata basis from the time they are granted.
The changes come into effect from 16 October, in time for 2025 pay awards and any other awards made but not yet fully paid.
“These changes are the latest example of our commitment to boosting UK competitiveness,” said Sam Woods, deputy governor of Prudential Regulation at the BoE.
Regulators imposed rules to defer senior manager bonuses after the 2007-2009 financial crisis triggered concerns that bumper year-end cash bonuses could encourage bankers to take excessive risks and undermine the global financial system.
However, critics had said the rules put Britain at a competitive disadvantage to rival financial centres, where most bonuses are typically subject to deferral periods of three to five years.
(Reporting by Phoebe Seers, Editing by Iain Withers)
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