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/business/8223663.stm
The article has changed 25 times. There is an RSS feed of changes available.
| Version 17 | Version 18 |
|---|---|
| Support for tax to curb bonuses | Support for tax to curb bonuses |
| (about 1 hour later) | |
| The boss of the UK's financial services watchdog says he would be happy to consider the use of a new tax on banks to prevent excessive bonus payments. | The boss of the UK's financial services watchdog says he would be happy to consider the use of a new tax on banks to prevent excessive bonus payments. |
| Lord Turner, chairman of the Financial Services Authority (FSA), also said the financial services sector had "grown beyond a socially reasonable size". | Lord Turner, chairman of the Financial Services Authority (FSA), also said the financial services sector had "grown beyond a socially reasonable size". |
| The FSA said he was "not setting out any new policy" in his comments to Prospect magazine. | |
| Meanwhile the government said tax was a matter for the chancellor. | |
| If we introduce the wrong kind of regulation or the wrong kind of taxes we could [drive] business abroad Brian Capon, British Bankers' Association | If we introduce the wrong kind of regulation or the wrong kind of taxes we could [drive] business abroad Brian Capon, British Bankers' Association |
| Lord Turner told Prospect magazine, in an interview that was conducted on 7 August, that a tax on financial transactions in the City would cut banks' profits, and thereby reduce the funds available for bonuses. | Lord Turner told Prospect magazine, in an interview that was conducted on 7 August, that a tax on financial transactions in the City would cut banks' profits, and thereby reduce the funds available for bonuses. |
| He said such a tax would be "a nice sensible revenue source for funding global public goods". | He said such a tax would be "a nice sensible revenue source for funding global public goods". |
| 'Very difficult' | 'Very difficult' |
| British Bankers' Association spokesman Brian Capon said the UK was the top centre in the world for global banking, "an achievement that we shouldn't take lightly". | British Bankers' Association spokesman Brian Capon said the UK was the top centre in the world for global banking, "an achievement that we shouldn't take lightly". |
| "If we introduce the wrong kind of regulation or the wrong kind of taxes we could so easily lose that position by driving business abroad," he said. | "If we introduce the wrong kind of regulation or the wrong kind of taxes we could so easily lose that position by driving business abroad," he said. |
| Lord Turner conceded that "the problem is that getting global agreement will be very difficult". | Lord Turner conceded that "the problem is that getting global agreement will be very difficult". |
| G20 leaders have been discussing bonuses and said in April that they would clamp down on excessive pay. | G20 leaders have been discussing bonuses and said in April that they would clamp down on excessive pay. |
| French banks have recently agreed to a new set of rules. These mean there will be penalties for traders who lose money, as well as rewards for success. | French banks have recently agreed to a new set of rules. These mean there will be penalties for traders who lose money, as well as rewards for success. |
| French President Nicolas Sarkozy has said he will press for tougher controls on bankers' bonuses at the next G20 summit in the US city of Pittsburgh in September. | French President Nicolas Sarkozy has said he will press for tougher controls on bankers' bonuses at the next G20 summit in the US city of Pittsburgh in September. |
| 'Socially useless' | 'Socially useless' |
| Lord Turner also addressed the question of whether the financial services sector had become too big. | Lord Turner also addressed the question of whether the financial services sector had become too big. |
| He condemned some financial innovation as "socially useless", questioning whether "the world would have been better off without any credit default swaps". | He condemned some financial innovation as "socially useless", questioning whether "the world would have been better off without any credit default swaps". |
| "There clearly are bits of the financial system... which have grown beyond a socially reasonable size," he added. | "There clearly are bits of the financial system... which have grown beyond a socially reasonable size," he added. |
| He said that you could tell that by considering "what percentage of highly intelligent people from our best universities went into financial services". | He said that you could tell that by considering "what percentage of highly intelligent people from our best universities went into financial services". |
| 'A ploy' | 'A ploy' |
| The FSA was formed in 1997 to regulate the UK's financial services sector and some analysts have suggested there may be political reasons for Lord Turner to be tough on the City at the moment. | The FSA was formed in 1997 to regulate the UK's financial services sector and some analysts have suggested there may be political reasons for Lord Turner to be tough on the City at the moment. |
| "[The comments] may be a ploy to persuade Mr Osborne and the Conservatives that, were they to be elected, they should retain the FSA rather than pass the baton for regulation to the Bank of England, which is one of the shadow cabinet's proposals," James Bevan from CCLA Investment Management told the BBC. | "[The comments] may be a ploy to persuade Mr Osborne and the Conservatives that, were they to be elected, they should retain the FSA rather than pass the baton for regulation to the Bank of England, which is one of the shadow cabinet's proposals," James Bevan from CCLA Investment Management told the BBC. |
| HAVE YOUR SAY It may prove counter productive as business may move away to a more conducive environment Jacques, UK Send us your comments | |
| This is not the first time Lord Turner has spoken out against large bonuses in the banking sector. He said back in June that the FSA had "concerns" about executive pay. | This is not the first time Lord Turner has spoken out against large bonuses in the banking sector. He said back in June that the FSA had "concerns" about executive pay. |
| And on 12 August, the FSA said it was introducing new rules to ensure bank bonuses were not guaranteed for more than a year, and that senior employees should have their bonuses spread over three years. | And on 12 August, the FSA said it was introducing new rules to ensure bank bonuses were not guaranteed for more than a year, and that senior employees should have their bonuses spread over three years. |
| These rules are due to come into effect from January. | These rules are due to come into effect from January. |
| Lord Turner's opinions on the issue carry particular weight because he is both chairman of the financial regulator and a City insider who used to hold senior positions at both Standard Chartered and Merrill Lynch. | Lord Turner's opinions on the issue carry particular weight because he is both chairman of the financial regulator and a City insider who used to hold senior positions at both Standard Chartered and Merrill Lynch. |