Barclays announced Monday its plan to overhaul pay policies across the bank as it confirmed the turmoil in the credit markets and the global economic recession weighed on its profits, according to the Financial Times.

Barclay's chief executive John Varley said total bonuses paid to all Barclay's employees last year were down 48 percent across the group, and by even more in the investment banking arm.

The UK government promised on Sunday to introduce pay curbs for any institution that seeks government support, including access to its insurance scheme for capping banks' loan losses.

For 2009 and beyond, we are reviewing our compensation policies and practices to ensure they evolve appropriately. Our endeavor, as we do this, is to maximize the alignment between these and the interests of our owners, as well as to ensure our compensation policies and practices are appropriately benchmarked to changing best practice in the industry, Varley said in the company’s annual report.