Barclays has made headlines by becoming the first major UK bank to formally remove the cap on bankers' bonuses, a measure originally introduced by the EU in the wake of the 2007-08 financial crisis. The change means that some of the bank's top employees could now potentially receive bonuses worth up to 10 times their base salary.
This move follows a decision by UK regulators last year to scrap the restriction, which limited bonuses to twice a banker's salary. While Barclays is the first to formally announce the change, other major UK banks like Lloyds and HSBC are also expected to follow suit.
The bank insists that individual compensation will continue to be performance-based and market-informed. However, critics argue that the removal of the cap could lead to a resurgence of the risk-taking bonus culture that contributed to the financial crisis.
The decision reflects a broader debate about the balance between incentivizing top talent in the financial sector and ensuring financial stability. While proponents of the change argue it will enhance the UK's competitiveness, opponents fear it could lead to excessive risk-taking and exacerbate income inequality.
