Banker bonuses to hit £2.75bn despite PM’s pledge on excess

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The Prime Minister promised that the days of "irresponsible behaviour" and excessive bonuses "are over" as he unveiled his £500 billion bank rescue plan this week and said that institutions seeking state help would be required to curb executive pay.

It emerged today, however, that the Financial Services Authority, which is in charge of City regulation, has no plans to draw up a code of conduct that would set new, more restrained, benchmarks for bonuses.

At the same time, economic forecasters predicted that City bonuses this year will top £3.5 billion, despite the banks' catastrophic performance, with further payouts of £2.75 billion next year. Both figures are lower than in previous years.

The absence of any plan for a new FSA code of conduct — which in case would be voluntary — will intensify the pressure on Mr Brown to spell out how he plans to match his rhetoric over curbing bonuses with concrete results.

Even supportive newspapers were today suggesting that the Prime Minister's comments "sounded increasingly hollow".

As part of the bank rescue plan, the Government will own preference shares in the seven banks involved, but these do not come with any voting rights, restricting ministers' influence over remuneration.