Pay rises in the City of London have fallen this year, with average increases of 2% compared with 12% last year, according to new research.
Average basic pay for managing directors fell by almost a third from £237,000 to £167,000, said recruitment firm Astbury Marsden.
Its study found that the average wage in the City increased from £83,000 last year to £84,438.
Mark Cameron, chief operating officer at Astbury Marsden, said: "The Financial Service Authority has recently gone to the lengths of briefing the chairs of remuneration committees that overall pay should show a sharp decrease in 2012 - that is an unprecedented step to take. It shows just how much pressure the banks are facing from the FSA on staff pay.
"With guaranteed bonuses in the City now strictly off the menu, banks and hedge funds have been relying on higher base salaries over the last couple of years to attract senior staff.
"The current trading and regulatory environment has now made those higher fixed costs unsustainable, and some senior bankers may have been willing to bite the bullet and take a pay cut just so they stay in a job."