The business editor is Simon Jack.
The Treasury is looking at removing a cap on bankers' bonuses.
The chancellor considered it to be a way of making London more attractive to global banks.
The EU's bonus rules cap bonuses at twice an employee's salary, which has long been complained about by city bosses.
Higher base pay pushes up banks' fixed costs.
The UK is less attractive than the US or Asia due to those costs not being adjusted in line with financial performance.
The new chancellor is considering the move, according to people close to Mr. Kwarteng.
The financial crisis of 2008 was caused by excessive risk taking caused by uncapped bonuses.
Other new rules, such as the ability to claw back bonuses years after they are granted, achieve a sufficient disincentive.
Taking the lid off bankers' pay at a time when many households are facing hardship from the rising cost of living is just one of many deregulation initiatives being considered.
Rules that limit how much insurance and pension funds can invest in assets that are harder to sell at short notice are being relaxed.
The rules are part of the pan- European regulations.
The Bank of England is worried that relaxing the rules could expose retirees' savings to greater long-term risk and that lowering the amount of ready cash firms are required to hold could see them pay out any money freed up to their shareholders instead of investing in projects favored by the government.
Senior officials at the Bank have privately conceded that the fight over Solvency II is a political one that they could lose, and that Pitting the Treasury and the financial services industry against them is a key test of the Bank's independence.
At a gathering of senior bankers two weeks ago, Kwarteng presented his "unashamedly pro-growth plan" for the economy.
He would argue that the instincts that convince him to cut banking regulations are the same ones that led him to throw a £100 billion shield over businesses and households.
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