New deal on bankers’ bonuses

The main five British banks will be doling out some jumbo bonuses after Christmas.

What’s changed today is that the Chancellor met the main British banks’ remuneration bosses first thing this morning at the Treasury and the banks said they would abide by the G20 rules which the government intends to bring into law in 2010.

So the bonuses will appear in the bankers’ Christmas stockings – just wait for the truly hideous headlines – but full payment will be deferred for something like three years and only paid across when it’s clear they weren’t short-term evaporating profits.

There are similar moves afoot in the EU and the US. Lord Myners, the City Minister, will next week meet the London bosses of the overseas banks and hope for a similar sign up to the G20 principles.

It all reminds you that the banking world is carrying on paying itself mighty sums at a time when it is propped up by taxpayer money.

The clawbacks may well not happen because City activity in 2008 isn’t the same profile as activity in 2009… and the profits also owe a lot to the fact that the competition’s shrunk.