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FSA fails to crack down on bankers’ pay

FSA Sky Angular 480

The FSA has not brought a single enforcement case over failures to comply with the regulator’s remuneration code since it was introduced three years ago.

The Sunday Telegraph reports FSA staff have been holding back from launching enforcement cases and are instead opting for regular informal conversations with banks and brokers.

One source told the newspaper: “We have seen at least one firm where more than half of its new staff have been hired with guaranteed bonuses, which is clearly against the spirit of the code that says these type of arrangements should only be used in exceptional circumstances.”

The FSA introduced its remuneration code in 2009 in a bid to reduce the size and number of payments made to new staff by banks.

Another source said: “Banks are doing all sorts of things to get around the code. The fact that no firm has been brought to book tells you everything you need to know about how worried they are about being caught.”

The FSA confirmed to the Telegraph no enforcement action had been launched over failures to comply with its pay code.

In a statement, the regulator said: “Our code expects guaranteed bonuses to be the exception, and if paid to new hires they should only apply to people in their first year in the job.

“We continue to work closely with firms to monitor how they comply.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Now that Sants has joined Barclays the FSA will never crack down on bankers pay, otherwise he would have to give up £3000000 pa and we cant have they can we

  2. And what a coincidence that as the FSA don’t crack down on bankers pay that Hector Sants comes off his long paid leave to take up a post with Barclays on circa £3million + benefits etc…. Oh and a knighthood awarded for all his hard work for ‘sleeping at the helm’ at the FSA during the banking crisis. Or did he get the knighthood for bringing in RDR tomorrow? Perhaps in a year or so when the powers that be realise what a mess RDR is for the ordinary people his knighthood will be taken back, like that of the other great banker, Fred Goodwin. Trouble is that in the meantime both will have made an absolute fortune for themselves and caused misery for so many people
    and their families.

  3. And he gets a knighthood and a job with a bank with some delightful bonus package.

    My Dad used to say walk slowly and take long strides because you will stand in fewer cow pats this way.

    This man appears to be able to gallop through a field without standing on a single pat!!

  4. Richard Billington 31st December 2012 at 3:47 pm

    Having returned from holiday, I am utterly disgusted to learn that Hector Sants has been given a Knighthood. This should not happen. HS did nothing to improve the standards of banking within the UK and did nothing to prevent the crisis of 2008 to 2010. In giving a Knighood to a man like this sets entirely the wrong precedent.

  5. Why are we outraged? This abject failure is one of an elite bunch of self serving Eton schoolboys who award each other highly paid positions (regardless of ability) and reward each other with massive salaries and gongs! I welcome the revolution.

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