US financial groups with operations in London are increasingly concerned that British regulators' tough stance on pay could create a two-tier system in which UK bankers' bonuses are smaller and spread over a longer period than those of American colleagues.
Wall Street executives say the line taken by the UK's Financial Services Authority contrasts with the more flexible approach of the Federal Reserve and could lead to uneven pay scales for bankers in similar jobs on opposite sides of the Atlantic.
“We have legitimate concerns on how we can pay our people fairly,” said a senior banker at a big US bank. “The FSA appears to be more heavy-handed than the Fed so which guidelines should we be following?”