BoE says banker bonuses can be clawed back for up to seven years

LONDON, July 30 (Reuters) - Bankers who break the rules mayhave to hand back bonuses up to seven years after being awardedthem, the Bank of England said on Wednesday.

The Bank had proposed in a consultation paper in March therecould be clawback of bonuses up to six years from the date theywere fully paid out.

Britain is introducing some of the toughest curbs on bonusesin the world at a time when bad behaviour is still beinguncovered.

The rule will come into force next year.

"In order to ensure a consistent and even application of theclawback requirement across industry, the final rule requiresthe application of clawback only to awards made on or after1 January 2015," the Bank said.

Bonuses are typically paid out over three to five years andcan already be clawed back during this time, but the new rulegoes further to allow the clawing back of an award after it hasbeen received.

The Bank also said on Wednesday it is now proposing that thedeferred portion of a bonus should be paid over at least five orseven years, depending on seniority.

Probes into some misconduct, such as rigging of marketinterest rates, take several years, meaning the bankers involvedmay have already been paid bonuses covering the time therule-breaking took place.

Earlier this week Lloyds was fined $370 million forrigging market benchmarks and there are allegations that bankshave been rigging the foreign exchange market. (Reporting by Huw Jones, editing by Matt Scuffham)