Monetary rewards should only be given to employees on the basis of achievements measured over a long period of time.

That is according to the British Bankers’ Association (BBA), which has been commenting in light of proposals from the think tank Policy Exchange on executive compensation.

The bonus reform proposals were introduced to prevent a recurrence of the current financial crisis and the Policy Exchange has warned that pure cash bonuses simply encourage short-term thinking.

Giving his reaction to the bonus reform proposals Brian Capon, spokesman for the BBA, said: "Big money bonuses have only ever applied to a very small number of staff, but we believe in proper controls and sensible measures with rewards related to long-term performance.

A recent consultation paper published by the Financial Services Authority has suggested that any decisions on remuneration should be made on a global scale to ensure consistency.