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Osborne forced to withdraw bank bonus plans

Chancellor George Osborne (pictured) has been forced to withdraw plans to improve pay transparency in the banking sector after deputy prime minister Nick Clegg and business secretary Vince Cable made it clear the Liberal Democrats would not accept the proposals.

According to the Financial Times, the “peace deal”, which was formulated with the help of former Barclays chief executive John Varley, was expected to be unveiled on Monday.

Under the agreement, banks would have to reduce bonus payments, disclose the pay details of their top executives and increase gross lending to businesses from £160bn to around £180bn.

If the banks agreed to the deal, the Government promised it would not impose new regulations and taxes on banks, creating a “level playing field” with other financial centres. However, it is thought the prospect of splitting up banks’ retail and investment businesses remains.

The LibDems are understood to think the measures would allow banks to get away with only modest concessions.

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Comments

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

  1. A bonus provides revenue to the HMRC in the form of income tax and NI. In its current position I would have thought that was what the Govt wants.

  2. I hope the banks start to appreciate the absolute fury that is felt regarding bonus structures for bankers who have effectively failed. Will the bonus be paid for reaching capital adequacy requirements? Doubt it, just more smoke and mirrors and the Lib Dems are right to tell them it willnot wash any more. just wish they would get on with making necessary changes as nothing much has changed as yet. The regulator rip off should be addressed now too.

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