UK wants to ban “cash bonus” by banks
The bank management members have so far been receiving all their bonuses in cash, which has induced them to take unwanted risks on all the speculative deals. And this is precisely the reason behind the big financial crisis that rattled the entire global financial system.
Now most of the UK legislators want to ban cash bonus payouts by banks, and instead want the bonus payments to be made in equity shares of the respective banks, with a lock in period. That in turn could help the banks to save lot of cash, which will reduce the cost of funds for the bank, and help strengthen the capital of the banking system.
