The FSA has just substantially increased the likelihood that senior-end salaries will increase

We observed a while ago that senior-end salaries in investment banks appear to be rising again.

Having heaved up salaries to 300k+ last year, some banks are allegedly hauling them higher still. 500-600k was mentioned.

As of yesterday, those rumours look far more likely to become reality.

This is because the FSA has decided to delay publication of its final rules on banking compensation until after the Committee of European Banking Supervisors has finalised its own rules.

The new FSA publication date is likely to be the 11th or 12th of December, instead of mid-November.

This creates a dilemma for banks, which will need to digest and implement the rules before bonuses are announced and paid. US banks typically divulge numbers in early to mid-January, leaving less than a month (Christmas included) to finalise pay structures.

At particular issue is CEBS' apparent requirement that bonuses will be restricted as a percentage of salaries.

Given that no one knows precisely what this restriction will entail, and given that no one will know until the last minute, it seems to make sense to hike salaries pre-emptively.

"Some of us are adjusting salaries accordingly," confirms a senior compensation specialist at one US bank.

"It's the law of unintended consequences," observes Cliff Weight, director at pay consultancy MM&K. "We already have anecdotal evidence that salaries have gone up again."