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* FCA says bonuses being clawed back after misconduct fines
* Says banks trying to circumvent bonus caps
By Huw Jones
LONDON, Feb 4 (Reuters) - Tougher guidelines on financialsector pay are under consideration by the UK watchdog, thoughextending a cap on banker bonuses to the wider industry looks astep too far, a top regulator told UK lawmakers on Tuesday.
Under new European Union rules, banker bonuses can be nohigher than an individual's fixed salary, rising to double thatlevel if shareholder approval is obtained.
Financial Conduct Authority (FCA) Chief Executive MartinWheatley told lawmakers the watchdog's remuneration code forbanks and building societies would be reviewed.
"We are consulting on the remuneration code later this yearand a big consideration is whether and how far the code we haveneeds to be extended," Wheatley told the Treasury SelectCommittee.
Pressed by lawmakers on whether the cap on bonuses should beapplied to insurers and asset managers, Wheatley replied: "Itsounds to me disproportionate."
Britain is challenging the bonus cap in the EU's top court,saying it in practice makes it harder to curb excessive pay andhampers a bank's ability to cut costs when markets turn sour.
Wheatley said the cap, which will hit bonuses awarded inearly 2015 and onwards, was already having "perverse" effects byprompting banks to bump up basic salaries or take other measuresin anticipation of the measure coming into force.
"People are finding ways to pay cash amounts to move outsidethe caps being constructed," Wheatley said. "The reaction hasbeen self-defeating and it has put up (the) fixed costs offirms. It's not an ideal outcome."
The cap will also make it harder for regulators to claw backbonuses, though it would not damage the City of London as aleading financial centre as some have argued, he said.
Wheatley is trawling through banks' plans to award bonusesfor 2013, checking if they reflect poor conduct at severallenders, such as fines for mis-selling financial products andrigging benchmark lending rates.
Banks including Barclays, Lloyds and RBS have been subject to substantial fines for varioustransgressions in recent years.
"Real money has been clawed back," Wheatley said, withoutbeing more specific about which banks or individuals had beenaffected.
Lawmakers asked if senior managers at Lloyds would havetheir bonuses clipped following the bank's record 28 millionpounds fine in December for the way it encouraged staff to sell2 billion pounds of products that customers did not need.
Wheatley said the "whole concept of clawback" was thatpeople involved in bad decisions should suffer the consequencesof their actions.
