Bonus payments in the financial services sector have "got out of control" in recent years, Prime Minister David Cameron said, raising pressure on banks to rein in annual rewards for top executives in the coming weeks.
Cameron also confirmed that the government would set out detailed proposals next week on curbing executive pay, with staff in taxpayer backed banks Lloyds and RBS to see their cash bonuses limited to £2,000.
"There should be a proper, functioning market for talent at the top of business. And that will inevitably mean some people will earn great rewards," Cameron said in a speech.
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"But that is a world away from what we've seen in recent years where the bonus culture -- particularly in the City - has got out of control," he added.
"As the Governor of the Bank of England (Mervn King) reminded us this week, excessive bonuses reduce lending to small businesses," he added.
City A.M. Reporter