TOP FIVE BANKS SIGN UP TO BONUS ACCORD
THE UK’s “big five” banks have committed to rules on pay agreed at the recent G20 summit in Pittsburgh, the Treasury announced yesterday.
State-backed Royal Bank of Scotland and Lloyds Banking Group, as well as HSBC, Barclays and Standard Chartered, issued a joint statement saying that they would “work with the FSA (Financial Services Authority) in adopting these remuneration reforms”. Santander UK is expected to sign up in the next few days.
The agreement will see the banks apply G20 standards on disclosure of payments, bonus deferral and clawback, effective from 1 January 2010 for the current financial year.
Chancellor Alistair Darling will now urge EU finance ministers to secure similar deals when he meets them in Sweden tomorrow, with France due to do so today.
There was some surprise that Barclays had signed the deal, given its stated desire to be free to pay bonuses where necessary. But one observer said: “They had to. The mood has changed.”
Tory shadow chancellor George Osborne said: “The proof will be in the pudding when we see the scale of the bonuses that are paid out at the end of this year.”
The agreement came as the FSA said it would continue consulting on elements of chairman Lord Adair Turner’s proposals for regulatory reform, after banks and industry bodies asked for more time. British Bankers’ Association chief executive Angela Knight said the FSA’s plans needed to be costed first.
“The true cost of change needs to come with a comprehensive invoice attached,” she said.