views

FSA hits back as MPs attack

THE FINANCIAL Services Authority (FSA) yesterday hit back at MPs, after all three political parties rounded on the City regulator over its rules on executive pay.<br /><br />FSA chief executive Hector Sants said it was not the watchdog&rsquo;s job to wage war on bonuses for social reasons, and that politicians should bring in laws to cap pay if they believe there is a moral reason to do so.<br /><br />He said MPs should have taken part in the pay rules consultation, rather than simply issuing &ldquo;sound bite&rdquo; criticisms after the final rules had been issued.<br /><br />And he said the final version of his pay policy was actually tougher than an earlier version proposed in a March consultation, as it added a rule preventing firms from guaranteeing bonuses over more than one year.<br /><br />The FSA came under fire after several bonus-curbing measures were reduced to purely &ldquo;guidance&rdquo; in the final version of its rules.<br /><br />The Labour Party joined the attack on the FSA yesterday, with cabinet ministers threatening to launch separate legislation to crack down on bonuses.<br /><br />Business secretary Lord Mandelson is understood to be angry at the FSA for failing to reflect public concerns that the City is returning to business as usual having benefiting from giant taxpayer-backed bailouts.<br /><br />Meanwhile, Liberal Democrat Treasury spokesman Vince Cable said the FSA had &ldquo;capitulated at the first sign of dissent&rdquo; over the pay crackdown.<br /><br />Earlier this week, shadow chancellor George Osborne, who has pledged to scrap the FSA if his party is elected next spring, said the FSA had pulled its punches when it came to the rules.