Bonus caps can undermine the system put in place to regulate remuneration as they reduce the amount of pay "at risk" at a later date, research from the latest Bank of England quarterly bulletin suggests.
In the article, Marilena Angeli and Shahzad Gitay, from the bank's cross sectoral policy division, highlight the impact bonus caps have had on the ratio of fixed and variable remuneration, and the knock-on effects for regulators.
"A significant consequence of limiting variable remuneration is a
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