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Sants pledges that FSA will focus on bankers’ bonuses

Bankers’ bonuses will come under scrutiny as part of the FSA’s assessment of financial institutions’ exposure to risk.

The regulator’s chief executive Hector Sants said in a speech at the Investment Management Association annual dinner last week that remuneration structures should ensure that employees and shareholders share the financial risk.

He said: “From the regulatory point of view, it is not our role to dictate the quantum of individual remuneration, that is for the market, but we do need to consider the implication of remuneration structures when judging the overall risk of individual institutions. We will do this with increased intensity.”

Sants also urged senior management in the banking sector to commit to improving their risk management.

He said: “In many cases, management of both credit and liquidity risk has been inadequate and recent events are evidence of this.

“It is now up to us, and by that I mean the FSA and senior management in the industry, to understand the steps that need to be taken and to take action.

“As I have said before, a good test for non-executives is to ensure that their board understands the circumstances under which their firms will fail and are comfortable with that risk.”

Sants said the FSA will be focusing its efforts on more intensive supervision, increased transparency and improved consumer protection.

He said that all major companies will need more robust contingency plans and sustainable funding and liquidity plans.

He added: “From the consumer perspective, the FSA is keenly aware of the need to restore consumer confidence. We should have a system which would allow banks to fail, with the cost falling on shareholders and management, but not retail savers.”


UBS in 8bn rights issue

UBS is to launch a 7.8bn rights issue. The fully underwritten rights issue will be offered to shareholders at a discount of more than 30 per cent.

E-commerce chief quits Aegon

Aegon head of e-commerce David Campbell is leaving after a restructuring of the IT management team.

Mean time at the Rock

The UK finds itself in a most peculiar situation where a state-owned bank is treating its customers probably as unfairly as it is possible to treat them short of defrauding them of their money.

Retirement - thumbnail

(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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