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FSA says bonuses are an issue for Government

The FSA has said it is not responsible for dictating individual bankers’ bonuses and that this is a matter for Government.

FSA chief executive Hector Sants told the BBC’s Andrew Marr Show on Sunday that the size of individual payments to bankers is not a consideration for the regulator.

He said: “That is one for politicians and society as a whole. If politicians wish to take a view on that, then they should say so but they should not be asking the regulator to carry out a pay policy.”

Baronworth Investment Services director Colin Jackson says: “It does not leave a nice taste in the mouth when bankers at publicly-owned banks receive huge bonuses but that is a matter for the Government, not the FSA.”

Bill Warren Compliance managing director Bill Warren agrees it is for the Government to set the parameters of bankers’ pay, especially in the case of institutions largely public-owned.

In respect of banks such as Royal Bank of Scotland, which is 70 per cent Government owned and has just set aside £1.8bn for bonuses in its investment arm, Warren says: “Banks should be showing some humility and respect to taxpayers that are footing their bills.”

But Independent Financial Advisors’ Political Action Committee founder Neil Liversidge says: “Bankers’ pay is an issue for the FSA – it has obviously made advisers’ remuneration an issue under the RDR.”

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  1. FSA says bonuses are an issue for Government
    But evidently it’s okay for the FSA to interfere with the levels of fees and/or commissions charged by IFA’s, as it sought to do only a couple of years back. And for the FSA itself to go £12.2m into the red to fund its own bonus payments of £20m (which, on a vastly smaller scale, it would never permit any IFA firm to do). Now there seems to be talk of interference from the FSA on the issue of product pricing. So it’s still one style of regulation for the banks (i.e. virtually none) but quite another (much harsher) one for the IFA sector. And as for what the FSA itself does, well………….

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