London's lenders could see bonuses cut

Bonuses at London's banks may slump by almost 60 percent in 2008, with no return to the record payouts of the past four years likely for the "foreseeable future", the Centre for Economics and Business Research said.

Bonuses in the City of London, the UK's main financial district, may plummet to 3.6 billion pounds this year, from 8.5 billion pounds in 2007, the CEBR said in a report . Cash-strapped firms may be reluctant to or legally barred from paying bonuses after the UK government led a 50 billion-pound bailout of the banking industry on Wednesday, the CEBR added.

Prime Minister Gordon Brown is threatening to clamp down on banker's bonuses that some lawmakers say helped cause the credit crunch. The Financial Services Authority plans to draft a code covering executive pay at Britain's banks. UK bankers shared in more than 31 billion pounds of bonuses over the past four years, fueling demand for London real estate, cars and luxury goods. "We're witnessing a fundamental change in remuneration structures in the city," Richard Snook, the CEBR's senior economist, said in an interview. "The million-pound plus bonuses are going to be few and far between."