Barclays plans to revamp the way it pays many of its top-level staff in an effort to give the bank more stability and moving room if it runs in to trouble.The new incoming boss Bob Diamond is reportedly considering issuing contingent convertible bonds, or 'cocos', to more than 1,000 members of its senior-level employees in a move that could ward off criticism surrounding bank bonuses.The staff, who are expected to receive around £2.5bn this year in bonuses, would receive cocos to defer their payouts until the future. The issuance of cocos should please regulators as the bonds convert into equity should the bank falter, and act as cushions against losses. The news comes a day after Sir John Vickers suggested new regulations regarding the volatility of the banking sector.Vickers said the Independent Commission on Banking is still examining ways to separate the retail and investment activities of the country's top banks. He argued that any shortfalls in one unit could not be made up by the other."It must also be kept in mind that attempts to minimise risks in one part of the system can shift them elsewhere ? perhaps to a safer place, perhaps not. Ultimately, financial risks have to be borne, and in a market system they should not be borne by the taxpayer providing a generous safety net." Vickers also hinted that the capital requirements of the Basel III rules are not enough to prevent banks rushing to the aid of the taxpayer."Increasing the resilience of the financial system requires a dual approach ? measures to curb excessive risk-taking incentives and to limit the damage when failures occur."Credit Suisse has already announced plans to use coco bonds in its future pay schemes in to align compensation and risk. Many other institutions are thought to be considering the adoption of coco bonds as part of bonus packages to increase their capital ratios for financial stability.