Review launched into banking operations
Chancellor Alistair Darling has announced that an inquiry is to take place into the operations of banks after it was reported last week that banks are planning exorbitant bonuses for its staff.
The review will examine how banks are managed and Mr Darling expects the review to make recommendations about the effectiveness of risk-management by banks’ boards, including how pay affects risk-taking.
The review will also look at how boards operate, the balance of skills and the role of institutional investors.
The review comes after Royal Bank of Scotland (RBS) and Lloyds Banking Group (both partly-owned by the Government) are set to award bonuses to its staff.
RBS, which is 68% owned by the Government, is due to set a record in UK corporate history with a loss of £28 billion expected later this month but it is still set to award its staff bonus packages.
However, a spokesperson for RBS said that the bank has yet to ‘make a decision on remuneration policy for the year’.
Meanwhile, Lloyds Banking Group, which received £17 billion of taxpayer support last autumn, and is 43% owned by the Government, is to award bonuses to its senior London-based banking staff.
Speaking on the BBC One’s Andrew Marr Show, Mr Darling said that “no figure has been agreed on” but said he had told RBS “no-one associated with the losses should be rewarded“.
Last week, Business Secretary Lord Mandelson warned RBS about its intention of offering “exorbitant” bonuses to staff and warned other banks to “be mindful about how this looks and what public opinion will be“.
Meanwhile, Barclays is set to make bonus payments over the next few weeks. It is understood that the largest cheques will go to its traders and bankers in its Barclays Capital division.
Last year, staff at Barclays Capital received an average of £182,000 each.
Bonus packages are set to spark outrage among the public when it is banks who are being blamed for the recession.
Last month, nationalised Northern Rock sparked outrage after it paid almost all of its 4,500 employees a 10% bonus - an average of £2,000 each.
Finally, a separate review is underway by Leader of the Commons, Harriet Harman, into whether bonuses in the city discriminated against women.
Visited 2503 times, 1 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.