F executives of all of the UK’s major banks will be summoned to a meeting with chancellor George Osborne today, with the directors expected to try and sweeten the chancellor with offers of a multi-million pound lending target.
The meeting was due to take place on Monday but was postponed due to Osborne being stranded in New York by the snows in Britain.
It was convened in part to discuss increasing transparency measures to do with bankers’ pay, but the bankers are expected to offer to agree to a headline-grabbing target for lending to small and medium-sized businesses.
The move would give Osborne a way to claim victory while avoiding any further action on bonuses. The EU and the Financial Services Authority have just rolled out the most stringent bonus regulation in the world, with bankers no longer permitted to receive more than 20 per cent of their bonus in cash up-front.
The tough new regulation means that there is little more Osborne can do to regulate bonus payments.
But the agreement could be thwarted by business secretary Vince Cable, who recently called lack of disclosure on pay a situation that could foster a “poisonous fungus”.
Meanwhile, RBS is in negotiations over bonuses with its biggest shareholder: the UK taxpayer as represented by the UK Financial Investments (UKFI).
Sources close to the bank say that RBS has asked to be able to pay up-front cash bonuses of up to £50,000 so as to prevent an exodus of talent. For the last two years, RBS has been not permitted to pay any cash bonuses.