City pay is overtaken by Wall Street as pound falls

City bankers' pay has fallen behind that of their Wall Street counterparts for the first time in three years as bonuses in London have been slashed.

The average UK banker saw his or her bonus fall by 62% last year, according to research by headhunters Napier Scott Search. Across the globe the average fall in bonus was 55%.

But the greater difference between London and New York was made up by the 25% slump in the value of the pound against the dollar. Lower bonuses and the fact that many of them were paid later than usual accounted for almost as much of the gap.

Together this meant that some US bankers were paid as much as 40% more than UK bankers.

US banks tend to make their bonus decisions and payouts around November whereas European banks pay out in the new year. Thus most US banks had moved before the political ructions that surrounded bonuses.

Bankers based in the eurozone suffered an average 48% fall in their pay packages and that would have been even worse if the euro had not strengthened against the pound.

Best-paid bankers were those who work at the highest levels of private banks where packages were little changed from the previous year.

Foreign exchange dealers suffered the lowest bonus cuts. Not surprisingly, bankers in structured credit who were largely responsible for the complex financial instruments that triggered the credit crunch fared the worst. On average their bonuses were slashed by 86%. Shaun Springer of Napier Scott said: "The banks weren't acknowledging any political or social pressure in November."

The timing combined to make European institutions far more socially aware.