Financial Regulatory Forum

Britain mulling new laws to curb bank bonuses-FT

August 14, 2009

Mandelson: worried    LONDON, Aug 13 (Reuters) – British government ministers are so unhappy with watered-down plans by the financial regulator to curb bankers pay and bonuses, that they are considering new laws to keep them in check, the Financial Times reported on Friday.
   The business newspaper said Business Secretary Peter Mandelson and other senior ministers are worried that a bankers’ pay code published by the Financial Services Authority this week fails to address fears that banks are returning to “business as usual,” paying huge salaries and bonuses after being bailed out by taxpayers.
   “Excessive risk-taking had the results we saw. Ordinary businesses are paying the price,” the FT quoted Mandelson as saying. “We have not heard the last word on this subject.”
   The FSA, which has been criticised for failing to address problems that led to the near collapse of the financial system last October, said on Wednesday that banker bonuses of more than one year would be banned. For details, see [ID:nLC475859]
   It also said two-thirds of bankers’ bonuses should be spread over three years to discourage short-term speculation, and warned that those who did not comply with the new rules faced higher capital charges or enforcement action.
   But industry experts said the FSA had watered down some of its original proposals set out in March.
   The FT said Mandelson and other ministers think legislation may be needed to control short-term risk taking, unless the FSA decided to take a tougher line. ((kate.kelland@reuters.com; +44-207-542-7947; Reuters Messaging kate.kelland.reuters.com@reuters.net)) Keywords: BRITAIN BANKS/BONUSES
  
Thursday, 13 August 2009 23:43:15RTRS [nLD197683 ] {C}ENDS

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •