The UK is scrapping the cap on bankers' bonuses as part of a post-Brexit overhaul of financial regulations, with the change set to take effect from October 31.
The cap, introduced in 2014 when the UK was part of the EU, limited variable pay for bankers, building society employees, and investment firm staff to twice their basic salary.
The decision to end the cap follows a four-month consultation by regulators, the Prudential Regulation Authority (PRA), and the Financial Conduct Authority (FCA), who argued that the policy had unintended consequences.
Critics are concerned that this move may incentivize more risk-taking, while regulators argue that they have other tools at their disposal to address this issue.