Bankers found guilty of misconduct would have to pay back bonuses received up to 10 years ago, under plans outlined by the Labour party.
The current clawback period is seven years, but shadow chancellor Ed Balls says this is too “weak”.
In an announcement ahead of the publication of Labour’s banking reform paper today, Balls says a Labour government would also require banks to publish the number of employees earning more than £1m.
Balls says: “Too often in recent years our banks have fallen far short of the standards expected of them. After so many scandals we need major reforms and long-term cultural change to restore trust and ensure our banks start working for consumers and businesses again.
“We will extend to at least 10 years the period bank bonuses can be clawed back in cases of misconduct. As we have seen in recent days, wrongdoing can take years to uncover. The current proposals to claw back bonuses are too weak.”
Labour also proposes introducing a one-off tax on bankers’ bonuses to held fund a jobs guarantee for young people, and an additional levy on the profits of payday lenders to raise funding for alternative credit providers.