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Barclays’ warning to regulators over bonuses
19 Oct 2009Barclays chairman Marcus Agius has warned UK regulators that they cannot afford to be tougher on banks than financial authorities in other countries such as the United States.
Within a day of reports that Barclays will make more than £10 billion in profits this year, triggering millions of pounds of bonus payouts, Agius warned that international rules on deferring bonuses for between three and five years were open to different interpretation.
“The same principles will apply in different ways in different capital markets with different outcomes,” Agius said.
“This is a global financial system. So I am very concerned that there should be a level playing field.”
His remarks follow a weekend of growing tension between politicians and bankers with Prime Minister Gordon Brown telling banks they must put lending to businesses and home buyers before “making huge payouts”.
Royal Bank of Scotland, which is 70% owned by the taxpayer, was forced to issue a denial that it has already agreed to pay bonuses of between £1 million and £5 million each to the top 20 staff in its investment banking business.
It said the reports that it could pay a total of £4 billion in bonuses were “totally without foundation” and that no bonus decision would be taken until the end of the year.
Banks are also railing against suggestion that they could face some kind of windfall tax in Chancellor Alistair Darling's Pre-Budget statement next month.
Angela Knight, chief executive of the British Bankers' Association, said that a blanket tax across the industry would be unfair on those banks which had not turned to the Government for a bailout.
Reader views (7)
It was the cynical arrogance and greed of the self-regarding financial elite that got us into our present mess. These pleadings from Barclays show the folly to be undiminished. This kind of banking is dangerous to our financial stability and a moral blot on our society. Of course, let the new regulations be tough; if bankers don't like it why not go to another country and debauch their economy. Odious businesses can be eradicated: England legislated against the slave trade two hundred years ago despite arguments to the contrary similsr to those now advanced to defend investment banking.
- Richard Kennard, Welling, 20/10/2009 07:58
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Mick, London, England - Try reading the article before commenting (for once). Barclays doesn't owe the tax payer a single penny.
- Dave Davies, Basingstoke, Hants, 19/10/2009 18:37
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Marcus Agius is talking sense. The government, and the FSA, are increasingly showing signs of deaperation and of being out of their depth.
- James Elliott, Eastbourne UK, 19/10/2009 18:15
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Barclays will hand over $3bn in corporation tax and their employess many billions more. The real issue with the banks is that whilst the uselss banks were rescued, their balance sheets remain very weak. as such they cannot lend money but in fact have to quietly shrink their balance sheets which explains the unwillingness to lend to even good credits. This leaves the field open for the likes of Barclays to cherry pick the lending opportunities creating a virtuos profits cycle. You cannot blame Barclays for running their business well? Bob Diamomd bought the Lehman business for the price of their Mnahattan HQ building! He bought a business making over $1bn profit a year for nothing!! Losers Brown & Darling are engaging in the classic scorched earth retreat tactic because they know they are utterly doomed at the next election!
- James Macleod Ritchie, Oyster Bay Cove, 19/10/2009 16:51
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These people have to be brought under control. A 100% tax on excessive bonuses and windfall tax on profits until all the money that was used to bail them out has been recovered.
- Mick, London, England, 19/10/2009 16:30
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You can see Gormless Gordon and Dimwit Darling crying into their coffee cups because they weren't able to get their hands on Barclays!! All that profit, and they can't have any of it - fantastic. Maybe all those doubters of the Barclays management team last year should start eating their words. Clearly independance from the UK governmnent was the right choice.
- E Heyworth, Chelmsford, Essex, 19/10/2009 11:01
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Spot on Marcus.
- Dave Davies, Basingstoke, Hants, 19/10/2009 09:27
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