The Financial Services Authority (FSA) is to publish a code later setting out how banks will have to change their policies on pay and bonuses.
The Financial Services Authority (FSA) has laid out new rules on how financial institutions will have to change their policies on pay and bonuses.
It wants to see bankers' bonuses in particular linked far more closely with the long-term profitability of the banks that employ them.
The FSA launched a consultation in February looking at measures to discourage excessive risk-taking.
The FSA launched a consultation in February looking at measures to discourage excessive risk-taking.
However it is not expected to stipulate how bonuses should be structured - amid fears this may restrict competition.
Many believe this risk-taking contributed to the financial crisis.
There were suggestions last week that bonuses have been returning amid a boom in profits from investment banking.
Redeployment concern
In March, a draft version of the remuneration code included the specific suggestion that about two-thirds of bank bonuses should be deferred - so that they were only paid out for long-term success.
It also put forward the idea that rewards paid to individuals should at least partly reflect the overall fortunes of the business.
However, these clauses are not expected to be included, the Financial Times said, because such policies have not been adopted in the US or the European Union.
This has prompted concerns that institutions would simply relocate employees outside of the UK, to get round the guidelines.
FSA chief executive Hector Sants, writing in the FT, said the new guidelines were "designed to ensure that boards prevent management from introducing compensation policies that, in effect, subordinate the interests of capital providers to those of employees".
