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FSA warns that failed bank bosses could have pay clawed back

FSA chairman Lord Turner has warned that bosses of failed banks could have two years’ pay clawed back from them.

Speaking to the BBC, Lord Turner said he was attracted to the action as it would discourage banks from taking excessive risks. The rule is already in place in the US.

The FSA has recently come under fire from Vince Cable for failing to release its report into the problems at Royal Bank of Scotland after it was bailed out by the Government in October 2008. Turner said that he was open to the idea of publishing these types of reports in the future, however he added the RBS report was difficult to publish due to it being broken down into numerous parts.

The FSA found no grounds for punishing the banks’ senior directors or the company.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. So will the same apply to the FSA staff then?

    Do unto others as you would do to yourself !!

    Given the damage the banks have done to the UK economy, which we are all having to pay for for generations to come and the utter and continuing failure by those who were paid to regulate them and protect the consumer, it is easy for those in authority to clobber those they want to, but how can they not take any responsibility and accountability themselves?

    Justice and fairness does not exist for those regulated by the FSA and as long as that continues few will have any confidence in their form of protection and justice. It is an abuse of power and privilege.

    They do not apply their form of justice to themselves and until they do I have no faith in them whatsoever.

    Accountability only exists outside of the FSA and Government.

  2. “RBS report was difficult to publish..”

    Beyond the wit of Turner?

  3. Yea Yea Yea

    Aliens land in Canary Wharf, Lord Lucan found riding Shergar, and yip……. there goes a flying pig!

    No chance this will happen. And it wouldn’t solve the problems anyway. The FSA are the problem!

  4. Ummm, the problem here may be in the definition of ‘failed’; did Northern Rock, HBOS, RBS etc actually fail? Or were they extracted from the mire before sinking irretrievably in. So, sounds good, but potentially no takers as none of the remaining banks will be allowed to fail as all play an integral part in the UK economy.

    Or am I just a cynic?

  5. As Mike said above, the FSA should have their pay stopped for failing to regulate the banks correctly, instead of harassing small IFA businesses…. the easy target!

  6. The proof of the pudding etc but, conceptually, I would say ‘about time too’. The issue goes deeper than regulatory failings and lies in the culture of the banks themselves. We can all jeer from the sidelines and burn effigies of bankers but they are human beings and, as we all know, those peculiar animals are motivated by incentives.
    If there are substantial personal gains to be made with no potential losses (which, for the individual bankers, there clearly were) who should be surprised that they availed themselves of those opportunities.

    Regulators regulate (with variable degrees of efficiency) but they are almost always reactive – and, unless there is a seismic shift in the balance of reward, they almost always will be.

    At least by attempting to introduce some element of personal risk to counterbalance the bankers obvious – and substantial – reward, there is something to think about beyond next years bonus.

  7. Time to become a lawyer 8th December 2010 at 4:42 pm

    Time to become a lawyer, I reckon.

    Get paid under your terms and conditions of employment, and then two years later have the FSA come and say you’ll have to pay it back, because they’ve changed the rules, retrospectively.

    That’ll surely help reverse the recklessness that the FSA oversaw. Let’s hope they then go after the general public for borrowing too much, and also the previous government.

    I’d love to see this adopted in other professions. Can we get the England team to pay back their earnings from this years World Cup? Plus, as we ‘failed’ in our bid for the 2018, perhaps the FSA could suggest the FA talk to FIFA about getting our money back!

    That’ll work

  8. Let me see now, what was Clive Briault’s pay-off for monumental failure and dereliction of duty? £612,000 all in, I seem to recall.

    Ah, but he had a very nice contract of employment which entitled him to “compensation for loss of office”. Unfortunately, the lawyers who drew it up forgot to include the caveat “unless you screw up.” So he screwed up and got the full works anyway. He must have been laughing all the way to the…………bank!

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