Lord Mandelson seeks further curbs on bankers
By Liz Stephens
Lord Mandelson is reportedly considering further legal action to clamp down on bonuses after yesterday’s FSA report was deemed inadequate.
Several senior government ministers were reportedly disappointed by the Financial Services Authority (FSA) report, which removed clauses to link bonuses to long-term growth.
Lord Mandelson thinks the new guidance set down in the report fails to address public concerns that the bonus culture is returning to the City, despite the banks receiving billions of pounds worth of taxpayer support.
The business secretary told the Guardian newspaper this morning: “Excessive risk-taking had the results that we saw. Ordinary businesses are paying the price. We have not heard the last word on this subject.”
City minister Lord Myners warned on Wednesday the government would take further action to crack down on the bonuses.
“The short-term bonus culture in the global banking industry must end,” he said.
“The government is pursuing all options to ensure banks can no longer get away with the risky pay and bonus policies that contributed to the financial crisis.”
An earlier draft of the FSA report contained clauses in the new rules requiring two-thirds of bonuses to be deferred, for firms not to pay any bonuses if they reported losses and for pay to be linked to the entire firm.
