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Banker bonuses to hit £2.75bn despite PM’s pledge on excess
Martin Bentham, Home Affairs Editor10.10.08
Gordon Brown's pledge to rein in bank bonuses was under scrutiny today after it emerged that the City regulator has no plans for a crackdown despite bankers heading for huge payouts over the next two years.
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.
Reader views (7)
Now that we are ALL going to be shareholders of these failed companies, we must be allowed to have the right to tell the useless directors that if they want pay, they have to show results, if not kick them out. In most cases, nobody would notice their absence as most of their "work" is done by their secretaries.
- L.Taubler, London / UK
Over here in Germany it seems that all the top bankers have gone into hiding, leaving the mess to the polititians and the public to sort out the mess. I expect them to be the first back on the scene when they can earn big money again.
- Bernd, Munich, Germany
I wish people would stop moaning about City workers receiving a bonus. So what? it's all a part of our pay deal. I bet for those who don't work in the City would not be moaning if they too recieved a bonus. Do you know how much tax we pay and pump back into the system? No one mentions our Tax contributions to our wonderful economy.
- Steve, Barnet
the very people brown is bailing out are still getting there bonuses! well i for one want my share too as iv been out of work now for 6 weeks due to the slump in construction, iv signed on and asked about some help with paying for a 4 day training course the girl in the dole officed said sorry no you got to be out of work for 6 months for any help with trainning !!!!!!!!!!
- Sean, london
Yet again as soon as selfishness and greed by the very rich is under threat they suggst that their will be an exodus of all of our top talent. Why on earth would anybody want to pay huge salaries for such an incompetent and greedy bunch of egomaniacs. There are not many UK CEO's who are lured away by US or European companies but they seem to use it as an excuse. As all of our political parties are keen to do something about bonuses let them unite, you too Camoron, and ban bonuses for three years so that Banks can rebuild their balance sheets. At the same time Britain should make our offshore banking system open and accountable. The terrorism legislation could be used for this. Banking must be cleaned up.
- S Lloyd, Brentford
Well if they can take these huge bonuses for screwing up our economy, they clearly don't need my money for a public bail out.
- S-M Hearmon, London, UK
Brown is playing for the gallery minding that he may be back to his Kirckaldy home in 2010. What was he doing all these 11 years? He was going around Europe preaching hispanacea for boom and bust. Now he is at it again today as the architect of the bail out plan.
Just how is he going to punish the fat cats? How is he going to monitor the performance of these senior managers and CEOs? It is a stunt to claw back his miserable poll lead.
We read today yet gain the loss of confidential data, adding to the previous data losses. When his government cannot ensure that personal data are kept confidential, thundering from him to punish the fat cats is a bit rich.
We will see city bonuses reaching billions, perhaps a shade less than previous years. If I as a fat cat get 15 million rather than 20 million, I would be happy, thank you Brown very much.
- Norman, LONDON
