The Bank of England has proposed a new rule for recovering bonuses of rule-busting bankers who have moved to a new employer. 
Britain already has among the world’s toughest rules on banker pay, introduced amid public anger over lenders being bailed out by taxpayers in the financial crisis and bankers pocketing big payouts at a time of austerity for most people. 
These rules allow for a bonus to be cut, stopped or clawed back.  But regulators said yesterday they wanted to go further to crack down on so-called “rolling bad apples” or bankers who pocket a bonus and then join another lender before any reckless behaviour is uncovered. 
“Individuals should be held accountable for their actions and not be able to actively evade the consequences of their actions,” Bank of England (BoE) deputy governor Andrew Bailey said in a statement. 
“Today’s proposals seek to ensure that individuals are not rewarded for bad practice or wrongdoing and should help to encourage a culture within firms where reward better reflects the risks being taken,” said Bailey, who also heads the BoE’s banks supervisory arm, the Prudential Regulation Authority. 
The proposed new rule targets buyouts, or when a bank compensates new employees for unpaid bonuses that were cancelled when they left their old bank. 
Regulators say that undermines the ability to claw back a bonus which has been paid or withhold or cut the unpaid portion of a bonus, when misconduct is later discovered. 
The proposed rule states an employee’s new contract would allow for a bonus to be recovered or not paid should the person’s former employer determine guilt in misconduct or risk management failings. 
“The proposed rules would also allow new employers to apply for a waiver if they believe the determination was manifestly unfair or unreasonable,” the BoE said. 
The proposals, put out to public consultation, would make it impossible for a banker to wipe the slate clean by changing jobs, said Alexandra Beidas, an employment lawyer at Linklaters. 
“It remains to be seen if this will be workable in practice as it will involve sharing potentially sensitive information between banks,” Beidas said. 
Last year, the BoE said it would stop short of actually banning buyouts as it would most likely lead to a competitive disadvantage for British firms given there is no similar rule in other financial centres around the world.
Meanwhile, the Bank of England has denied that it played any role in the decision by the Financial Conduct Authority (FCA) to scrap a review of culture in the banking sector. 
The Financial Times reported on Tuesday that an official at the central bank, Megan Butler, was a key figure overseeing plans by the FCA to drop the inquiry into whether banks had changed their working culture. 
Improving standards of behaviour at banks has become a priority for regulators after they fined several lendersbns of pounds for trying to rig the Libor interest rate benchmark and currency markets. 
Butler was seconded to the FCA last September when the decision was taken to scrap the review. “The Bank of England had no influence or role in the Financial Conduct Authority’s decision to drop its thematic review on culture and it would be wrong to suggest otherwise,” the BoE said in a statement late on Tuesday. 
The FCA had already said that its acting chief executive, Tracey McDermott, took the decision to scrap the review and that no other body played a part or exerted pressure on the watchdog. 
“As Tracey has previously said, the FCA decision to not continue with the thematic review on culture was taken by her,” the FCA reiterated on Tuesday evening, adding that any suggestion that influence had been exerted by the central bank or its Prudential Regulation Authority is simply untrue. 
The FCA said in its 2015 business plan that it would conduct a review into banking culture but in December said it had been shelved after preliminary work showed that engaging with banks individually was a better to improve conduct. 
Last year British finance minister George Osborne called for a “new settlement” to end banker bashing and ousted Martin Wheatley, the hardline chief executive of the FCA, raising lawmaker concerns about political interference in regulation. 
Osborne has said that he played no part in shelving the culture review. 
McDermott will be questioned by parliament’s Treasury Select Committee on January 20 about her decision to scrap the review.