Pay decisions left to banks
A TREASURY minister last night urged banks to show restraint when awarding bonuses, but said the government will only regulate pay as part of an international agreement.
Financial secretary Mark Hoban told the British Bankers’ Association dinner that the banking world has a real chance to reclaim its reputation.
“We have the opportunity to send a clear message to the public that the banking system now operates in a way that is fair and stable and no longer rewards employees based on short-term performance whilst leaving investors and taxpayers exposed to the long-term risks.
“It is better for the industry to lead these changes,” he said in a speech.
He added that the FSA has been asked to examine further options in its review of bankers’ pay.
It also emerged last night that the coalition has called a meeting with banking chiefs later this week to discuss industry reform, lending to businesses and banking stress tests.
Hoban praised the extended EU stress tests as building underlying confidence, and said the government will work with the G20 to introduce minimum capital requirements.
He also said the government will publish a consultation paper on the new bank levy today.