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Alistair Darling wants watchdogs to halt return of City bonuses
Nicholas Cecil, Deputy Political Editor15 Jul 2009
Alistair Darling today urged financial watchdogs to stop a return to the bonus bonanza in the City.
He wants the Financial Services Authority to be ready to act after it emerged bankers are in
line for bumper bonuses less than a year after the financial system came close to meltdown.
Staff at Goldman Sachs are soon to get mega-bonuses and the Standard understands that the Chancellor would be dismayed if they were to return so swiftly to the Square Mile.
A Treasury source said: “If big bonuses are being paid out, the regulator will be expected to
scrutinise the risk levels very carefully.”
Eyebrows were raised at the Treasury yesterday following reports that the 5,500 London-based
staff of Goldman Sachs were expected to be given
bonuses of an average £500,000 after the Wall Street giant announced £2 billion profits for the second quarter.
Bankers at Morgan Stanley, Deutsche Bank and Barclays are also in line for big bonuses this
year. The Chancellor is also believed to be against the big pay-outs widely given out at
part-nationalised Royal Bank of Scotland and the Lloyds Banking Group.
David Viniar, Goldman's chief financial officer, admitted it would be criticised over onuses.
“We know it. We see it. We don't like it. We believe we are doing good things,” he said.
“As you saw in 08, if we don't perform well, compensation goes down, and if we do, we reward people appropriately.”
Reader views (5)
More abject spin and waffle from Dizzy Darling.
He has not got a clue.
- Reuben Camara, Republic of Morecambe, UK, 16/07/2009 10:22
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Good old labour, 'Again' all mouth and no action.
- C Cusano, Bedford, 16/07/2009 09:22
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You can chalk this up as another Labour failure. They have no way of stopping banks paying out bonuses. They would have to introduce new capital adequacy rules, which would mean backing out of Basle II.
- Mark, London, 16/07/2009 09:22
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Maybe the regulator will "scrutinise the risk levels very carefully".
It should at least be checked that if the firm's profits are being earned in the UK or by UK-based people then UK tax is being paid on the bonuses. I have heard stories that this isn't necessarily the case.
- Tim, London, UK, 16/07/2009 09:22
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Oops, bit of a catch 22 isn't it? If you stop all corporations giving out bonuses then Labour will lose the next election, you can't just stop banks. If you limit it to the banks you have control over (i.e. the one's you leant money too), then the decent staff will all leave and you end up with huge debts and bankrupt banks. Darling's really thought this through hasn't he?
- Bob, Cheam, 16/07/2009 09:22
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