This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/uk_politics/8203793.stm
The article has changed 2 times. There is an RSS feed of changes available.
Previous version
1
Next version
Version 0 | Version 1 |
---|---|
Darling vow on City bonus rules | Darling vow on City bonus rules |
(about 8 hours later) | |
The government is ready to intervene over City bonuses, to stop bankers from taking excessive risks. | |
If bonuses pose a "systemic risk" to the banking system, Chancellor Alistair Darling would consider curbing them, the Treasury told the BBC. | |
The comment came after the chancellor told the Sunday Times large rewards for bankers had clearly encouraged risk-taking and contributed to the crisis. | |
The Tories have also said they would seek to end banks' big bonus culture. | |
In the newspaper he said he understood public anger over the issue and if tougher legislation was required, ministers would act. | |
Under Treasury plans, the banking regulator, the Financial Services Authority (FSA), would be given powers to control bonuses in all banks, a move which is likely to require new legislation. | Under Treasury plans, the banking regulator, the Financial Services Authority (FSA), would be given powers to control bonuses in all banks, a move which is likely to require new legislation. |
New rules | New rules |
"If we need to change the law and toughen things up, we can do that," Mr Darling said. | "If we need to change the law and toughen things up, we can do that," Mr Darling said. |
"I'm quite clear that some of the problems we have today were caused by the fact that some traders were incentivised to take risks which neither they nor their bosses fully understood." | "I'm quite clear that some of the problems we have today were caused by the fact that some traders were incentivised to take risks which neither they nor their bosses fully understood." |
The new rules would cover the whole of the banking system not just those institutions that are part-owned by the taxpayer, such as the Royal Bank of Scotland (RBS) and Lloyds. | The new rules would cover the whole of the banking system not just those institutions that are part-owned by the taxpayer, such as the Royal Bank of Scotland (RBS) and Lloyds. |
The public is rightly concerned because the taxpayer has had to stand behind a number of these banks, and the whole banking system in effect Chancellor Alistair Darling | The public is rightly concerned because the taxpayer has had to stand behind a number of these banks, and the whole banking system in effect Chancellor Alistair Darling |
Mr Darling's announcement follows criticism of the FSA over its perceived failure to take a tougher stance on bonuses. | Mr Darling's announcement follows criticism of the FSA over its perceived failure to take a tougher stance on bonuses. |
It has issued a new code stating awards should be linked more closely with the long-term profitability of banks and that they should not be guaranteed for more than a year. | It has issued a new code stating awards should be linked more closely with the long-term profitability of banks and that they should not be guaranteed for more than a year. |
But Mr Darling said more action was to come. | But Mr Darling said more action was to come. |
"The public is rightly concerned because the taxpayer has had to stand behind a number of these banks, and the whole banking system in effect," he said. | "The public is rightly concerned because the taxpayer has had to stand behind a number of these banks, and the whole banking system in effect," he said. |
"So people want to make sure we don't get ourselves into this situation again. The FSA code is only part of our approach." | "So people want to make sure we don't get ourselves into this situation again. The FSA code is only part of our approach." |
'Unacceptable' | 'Unacceptable' |
He said he was not against bonuses that rewarded "good behaviour and long-term growth", but they needed greater regulation. | He said he was not against bonuses that rewarded "good behaviour and long-term growth", but they needed greater regulation. |
"What you can do is make sure you don't get yourselves into a situation where firms actively have a pay system that results in them being exposed in a way that led to ruin, which it did in a number of cases," he added. | "What you can do is make sure you don't get yourselves into a situation where firms actively have a pay system that results in them being exposed in a way that led to ruin, which it did in a number of cases," he added. |
Mr Darling did not stipulate whether he would cap bonuses or ban those that had a guarantee. | Mr Darling did not stipulate whether he would cap bonuses or ban those that had a guarantee. |
Ministers are currently waiting for the delivery of an independent review of bonuses and corporate governance by Sir David Walker, former chairman of Morgan Stanley, before introducing new laws. | Ministers are currently waiting for the delivery of an independent review of bonuses and corporate governance by Sir David Walker, former chairman of Morgan Stanley, before introducing new laws. |
Shadow chancellor George Osborne revealed on Saturday a Conservative government would also seek to stop the payment of large bonuses across the banking system. | Shadow chancellor George Osborne revealed on Saturday a Conservative government would also seek to stop the payment of large bonuses across the banking system. |
He told the Guardian that handing out big awards backed by state guarantees was "unacceptable", even for banks that were not part-owned by the taxpayer. | He told the Guardian that handing out big awards backed by state guarantees was "unacceptable", even for banks that were not part-owned by the taxpayer. |
The Tories would also scrap the FSA and hand its powers to a strengthened Bank of England. | The Tories would also scrap the FSA and hand its powers to a strengthened Bank of England. |
However, the British Bankers Association (BBA) has said pay rules are already "more stringent" in the UK than in any other country. | However, the British Bankers Association (BBA) has said pay rules are already "more stringent" in the UK than in any other country. |
Previous version
1
Next version