FSA urges bonuses to be deferred

The Financial Services Authority (FSA) has called for further restraint in the banking sector.

In its code of practice on remuneration policies, published last month, the FSA said that those setting bonuses in the sector should ensure remuneration policies are based not only on staffs’ contribution to the financial performance of the company, but also on responsible attitudes towards, and not exposing their bank to, excessive risk.

While recognising the need for competitive reward packages, the code urged banks to defer two-thirds of every large bonus.

FSA chief executive Hector Sants said: “The code of practice clearly lays out the framework we expect firms to adopt.”