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UK's Darling plans review into bank management, pay
Source: Agencies |
February 8, 2009, Sunday
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Online Edition
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BRITISH finance minister Alistair Darling wrote in the Sunday Telegraph newspaper that he plans an independent review of banks' management and bonus structure.
"We cannot return to business as usual," Darling said on the newspaper's website. "I expect the review to make recommendations about the effectiveness of risk-management by banks' boards, including how pay affects risk-taking."
The Sunday Telegraph said Darling would announce who would chair the review and its detailed remit tomorrow.
As well as bonuses and risk management, the review would also look at the make-up of bank boards, Darling said.
"It is in everyone's interest to get banks' governance right. It would be wrong to reward people whose excessive risk-taking brought the banks down, causing misery to millions of their customers. Success should be rewarded. Failure should not."
Darling and Prime Minister Gordon Brown announced a multi-billion pound bailout plan in October for British banks that had lost market confidence, which has fuelled criticism of their employees' remuneration.
U.S. President Barack Obama has imposed a US$500,000 cap on the pay of top executives at American banks receiving taxpayers' money, and the European Commission said on Friday that it hoped European governments would follow suit.
Darling's colleague Harriet Harman, leader of the lower house of Britain's parliament, said at a Labour Party conference yesterday that banks' bonuses contributed to the earnings gap between men and women working in the financial services sector.
Legislators will question executives from a range of banks including Lloyds, HBOS, Royal Bank of Scotland, HSBC, Barclays and Banco Santander on Tuesday and Wednesday next week.
"We cannot return to business as usual," Darling said on the newspaper's website. "I expect the review to make recommendations about the effectiveness of risk-management by banks' boards, including how pay affects risk-taking."
The Sunday Telegraph said Darling would announce who would chair the review and its detailed remit tomorrow.
As well as bonuses and risk management, the review would also look at the make-up of bank boards, Darling said.
"It is in everyone's interest to get banks' governance right. It would be wrong to reward people whose excessive risk-taking brought the banks down, causing misery to millions of their customers. Success should be rewarded. Failure should not."
Darling and Prime Minister Gordon Brown announced a multi-billion pound bailout plan in October for British banks that had lost market confidence, which has fuelled criticism of their employees' remuneration.
U.S. President Barack Obama has imposed a US$500,000 cap on the pay of top executives at American banks receiving taxpayers' money, and the European Commission said on Friday that it hoped European governments would follow suit.
Darling's colleague Harriet Harman, leader of the lower house of Britain's parliament, said at a Labour Party conference yesterday that banks' bonuses contributed to the earnings gap between men and women working in the financial services sector.
Legislators will question executives from a range of banks including Lloyds, HBOS, Royal Bank of Scotland, HSBC, Barclays and Banco Santander on Tuesday and Wednesday next week.
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