Royds coverage in the Financial Times

Caroline Doran was commenting on the proposals, which are being considered by the Financial Conduct Authority (FCA) as a way of tackling misconduct.

While the move may have popular appeal, many solicitors doubt whether it is within the regulator’s power to revoke salary.

“A fixed-pay clawback regime would be a sea-change in the UK and create administrative and legal costs for the banks,” Caroline told the FT.

“At the most basic level it would introduce serious factual problems, including the specific day from which the fixed pay will be clawed back.”

The proposals were raised by the FCA’s chief executive Martin Wheatley during a session of Parliament’s Treasury Select Committee.

The option is being considered in response to a controversial cap on bonuses, which has been introduced across the EU. It was designed to curb pay and discourage wrongdoing, but has in fact led to an increase in base salaries.

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