Chancellor: ‘Party over for banks’

Prior to his departure to the G20 summit in Pittsburgh, Chancellor Alistair Darling warned bankers that the ‘party is over’ and the controversial bonus culture is set to change.

The G20 summit, which takes place today and tomorrow, is to focus on tightening global financial regulation.

The subject of bankers’ pay and bonuses are expected to feature high on the agenda at the summit.

Speaking to the BBC, Mr Darling said: “The key thing to get across to bankers is that for them the party has got to be over.”

“After all, there are very few bankers in the world who would still be standing if it hadn’t been for the fact that taxpayers all over the world had to step in and save them last year,” he added.

The Chancellor wants to use regulations enforced by the Financial Services Authority (FSA) to limit the proportion of profits banks can hand out in bonuses and make sure that there are no rewards for failure.

French President, Nicolas Sarkozy has already threatened to walk out of the G20 summit unless an agreement is reached with regard to bank bonuses.

France has long been arguing that excessive bankers’ bonuses reward the risk-taking that led to the financial crisis.

Earlier this week, Mr Sarkozy said he wanted to introduce a levy called Tobin Tax, aimed at curbing the bonus culture.

Tobin tax is the suggested tax on all trade of currency across borders and was named after the economist James Tobin in the 1970s.

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