Bankers 'Could Wait 10 Years For Bonuses'

No Pot Of Gold

10 years!

Banks could be required to defer bonuses for up to 10 years it emerged on Friday night under proposals being considered by members of the parliamentary commission on banking standards.

Members of the commission, chaired by Conservative MP Andrew Tyrie, had until Friday night to table amendments to a draft said to run to 600 pages before attending a two-day meeting from Monday to agree recommendations in their long anticipated report into the culture of the City.

Proposals are expected to cover bankers' pay, the role of auditors and how competition can be injected into the sector.

The commission, set up following the Barclays Libor-rigging scandal a year ago, has also taken evidence on whether bankers should be held to a set of ethical standards, similar to doctors, in an effort to clean up the culture in the City and whether a new set of criminal rules can be created.

Bankers' pay became a key topic after the financial crisis when it emerged that staff were handed millions of pounds in cash that could not be reclaimed when the profits were wiped out. Since then regulators have required bonuses for senior employees to be deferred over three years but it was reported the commission could recommend this be extended to up to 10 years to make it easier to claw back bonuses for a longer period and reduce risky behaviour.

The commission, which includes former Conservative chancellor Lord Lawson and the Archbishop of Canterbury Justin Welby among its members, also took evidence on the incentives given to bankers when they sell products to retail customers.

The commission would not comment on the contents of the draft report night. The commission members are expected to debate whether to adopt Lawson's idea to break up Royal Bank of Scotland into a good and bad bank – which may be resisted by George Osborne who has promised to set out a strategy for the bailed-out banks once the commission reports.

The chancellor has warned that splitting up RBS, which is likely to require the government fully nationalising the 81%-taxpayer owned bank, could cost up to £10bn. Welby has called for banks to be broken up into regional lenders.

The government has already taken steps to toughen up regulation of Libor, which is still being investigated by City regulators.

Among other areas the commission could cover is whether to try to make it easier for banks to be set up and whether to help customers switch between firms by making current account numbers transferable.

Powered by article was written by Jill Treanor, for The Guardian on Friday 7th June 2013 23.58 Europe/London © Guardian News and Media Limited 2010


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