MP bids to hold directors to account for losses
All-party Parliamentary group on economics, money and banking chair Steve Baker wants directors of financial institutions to be forced to take personal liability for their firms’ losses.
In a private member’s bill to be debated later this month, Conservative MP Baker calls for any losses to be “made good” first by directors’ bonuses which should be held back for five years, and then by personal bonds worth £2m or half of the director’s net wealth.
He says if this is not enough to cover losses, directors should be required to put more money into the bank or be declared bankrupt.
Baker says: “With key decision-makers’ wealth at risk, they could be expected to take responsible decisions instead of expecting rewards for failure.”
Lloyds Banking Group used powers to claw back bonuses for the first time this week when it stripped senior staff of £2m-worth of share bonuses over payment protection insurance misselling.
Baker says: “Bankers should bear their own risks and there should never be another taxpayer bailout of a bank. My bill would achieve those aims.”