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Labour conference: Brown to give FSA powers to fine banks over bonuses

Prime Minister Gordon Brown has created a new Business and Financial Services Act which will ban excessive bank bonuses and will give the FSA powers to impose penalties on firms that do not comply.

Speaking on the BBC’s Andrew Marr Show on Sunday morning at the start of the Labour Conference in Brighton, Brown said “enough is enough” and that he would not stand by and allow a return to the “bad old days” of excessive bank bonuses.

Brown said: “I want to say to you today just as we will have a fiscal responsibility to deal with the public finances, we will come back and we will have a new Business and Financial Services Act as well. That will ban the old bonus systems and make it impossible for firms to be able to use them.

“It will also say that where there is bad behaviour, the Financial Services Authority will have the right to intervene. And where companies are not prepared to act in a way that is consistent with all these new proposals about the fair treatment of bonuses and remuneration, there will be penalties imposed on these companies.”

Brown said the measure would be brought to House of Commons in the next few weeks as part of the Queen’s November speech.

The Prime Minister said he had become “utterly convinced” that this was the way forward after talking to other G20 leaders in Pittsburgh last week.

He said: “We’re now going to do it. I’ve become utterly convinced as I’ve talked to my fellow colleagues at Pittsburgh just how far we all have to go because they’re all reporting to me that the banks are just anxious to return to the bad old days. Some of them are ready to announce big bonuses that are completely unacceptable.”

The announcement forms the first stage of Labour’s “fightback” to win voters from the Conservatives and Liberal Democrats.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. A Henry VIII clause…
    …already exists in the FSMA 2000, just one of Her Majesty’s Ministers can add or remove anything the FSA needs with the stroke of a pen. Or am I missing something as usual?

  2. Brown on Bonus
    The largest beneficiary of bonus was “Brown” at 40% of the total paid in UK This is just window dressing Who was asleep on watch? If they  get rid of Tax Exempt income for MP’s If they were taxed on the same basis as the rest of us they start to understand If their pension were capped (Brown’s is worth about £3M) then again we might get away from this Animal Farm feeling (George Orwell was actually E.A Blair )

  3. Bonus culture
    Here we go again! More spin! If the FSA are given the powers to curb bank bonuses then surely there is a conflict of interest. The FSA base their salary & bonuses on the banking system. Are they going to curb their own ‘Fat Cat’ salary & bonus culture? I very much doubt it. I will give them 12 months & the corupt way of life that these people wallow in will be back to their sordid and immoral ways

  4. Brown to give FSA powers to fine banks over bonuses
    But what about the FSA’s culture of paying unearned bonuses of £20m (last year)? Surely, shouldn’t some sort of brake be put on this kind of profligacy at the expense of the industry? Is there not something extremely wrong about a quango that pays itself more bonuses than in any previous year at the same time as it is being pilloried from all sides for having manifestly failed to do its job properly? Even worse, the FSA is currently £12.2m in the red. Is this responsible financial management ~ about which the FSA is constantly lecturing everyone else (except the banks) ~ or is it just the same old snouts digging ever deeper into the trough? Most galling of all is that we all have to pay for it.

  5. Brown fudge.
    So who then will ban excessive bonuses at the FSA.?

  6. Ban the FSA too!
    They should be banning the Bank bonuses AND the FSA themselves ! The FSA are corrupt robbers who line their own coffers at the expense of FINANCIAL CRIMES
    – inglorious basterds

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