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Party is over for bankers, says Darling

Chancellor Alistair Darling has told bankers that the party is now over as the UK looks to work its way out of the recession.

In an interview with the BBC, Darling warned banks that their profits must go towards capital buffers and not over-excessive remuneration.

He said: “The key thing that we have to get across to bankers is that, for them, the party has to be over.”

Darling reiterated the sentiments of FSA chairman Lord Turner, who said in his Mansion House speech that the economic crisis was cooked up on trading floors by bankers who did not understand the complicated products they were trading.

He said: “It was hardly surprising that there was an almighty car crash.”

The Chancellor, who was talking to the BBC before he left for the G20 conference in Pittsburgh, said that the key to moving forward was to create a robust regulatory system to root out any future abuses of financial excess.

He said: “Most banks need to build up capital and build up buffers for the future and should not be paying out dividends and large bonuses. Let’s make sure that the FSA and the other regulators get into the banks and says ‘you have to stop these practices and we’ll make sure you do’.”

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  1. Party is over for bankers, says Darling
    The FSA regulating the banks? Whatever next? How will this square with Hector Sants’ assertion that the FSA is not a regulator of pay (except when it comes to dictating to IFA’s what the FSA considers acceptable levels of client charging)? And, if Alastair Darling is now stating that “the key to moving forward is to create a robust regulatory system to root out any future abuses of financial excess” are we to infer that in his view we do not at present have such a system? Surely, this constitutes yet more evidence to support the widely held view that the FSA doesn’t regulate the banks. IFA’s, of course, are a much softer target.

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