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Ministers look to legislate bankers’ bonuses, say reports

Senior cabinet ministers disappointed with the FSA’s remuneration code are considering introducing new legislation on bankers’ bonuses, according to the Financial Times.

Reports say ministers, including business secretary Lord Mandelson, are unhappy with the code for failing to carry through some of the draft proposals.

On Wednesday the FSA published its code which prohibits multi-year guaranteed bonuses.

The code eases up on requirements for banks to defer two-thirds of senior individuals’ bonuses and link bonuses to overall performance of a group, rather than individual or sector performance.

The FT says Mandelson thinks the guidelines have failed to reflect public concerns that the City is returning to business as usual after receiving millions in support from the taxpayer.

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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Ministers look to legislate bankers’ bonuses, say reports
    Given that the FSA seems to inflict on all other sectors of the industry more or less whatever it pleases, without regard for the legality or morality of its actions, it does seem decidedly odd that on this particular issue it [the FSA] seems keen to pass the buck to Parliament. Why doesn’t the TSC simply instruct the FSA to formulate a suitably robust code of practice for bankers’ pay? Surely, that would save the tax payer the cost of creating new legislation? As usual, the FSA seems keen to wriggle out of doing anything that might upset its buddies in the banking sector. Meanwhile, the sale of investment bonds paying 7.5% commission continues unchecked.

  2. Ministers look to legislate bankers’ bonuses, say reports
    Whilst they’re at it, they might look also to legislate on FSA bonuses. The case is equally compelling.

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