FINANCIAL SERVICES
Budget promises action on bank bonuses
Chancellor George Osborne in his "emergency" Budget promised today that the government will “take action on unacceptable bank bonuses”.
The government has asked the Financial Services Authority to "consider a number of factors" in its forthcoming review of its Remuneration Code. Alongside this the government will consult on a remuneration disclosure regime.
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Extract from Budget "Red Book"
“In addition to introducing a bank levy, the government is taking action to tackle unacceptable bank bonuses. The Independent Commission on Banking will look at structural and non-structural measures to reform the banking system and promote competition. The government will also consult on a remuneration disclosure scheme and, working with international partners, will explore the costs and benefits of a Financial Activities Tax on profits and remuneration. The government has also asked the Financial Services Authority as part of its forthcoming review of its Remuneration Code to:
consider imposing more stringent requirements on the deferral and award of variable pay
examine mechanisms for strengthening the link between performance and remuneration to ensure that incentives are aligned with the long-term performance of the firm
consider how to vary capital requirements to offset risk in remuneration practices.”
Want to know more?
For full details of what was announced in the June 2010 Budget visit www.direct.gov.uk.
--> The government announced on 16 June 2010 the establishment of an independent commission on banking, chaired by Sir John Vickers. It is due to report by September 2011. For more details visit hm-treasury.gov.uk/press_11_10.htm.