Downing Street Says

» Monday, March 9, 2009

Lloyds

Asked whether the Government thought the leadership of Lloyds was credible, the PMS said that our actions in relation to the leadership of Lloyds made it clear what our views were.

Put that now the Government had a stake of over 50% in Lloyds would there be strict rules on bonuses coming into effect, the PMS said that we had made our position very clear on bonuses in recent weeks and Lloyds had agreed that there would be no discretionary bonuses paid in 2009 except to the most junior staff who were earning an average of 20,000. So the principles that applied to RBS for example would apply to Lloyds as well.

Put that the Government was happy to see senior executives get bonuses paid out in shares, the PMS said that what we were happy for was to ensure that where there were bonuses, these reflected long-term performance. We were also happy to see claw-back clauses, so that should good performances not materialise, peoples bonuses were reduced.

Asked whether the Prime Minister would concede that he might have done well to leave Lloyds and HBOS well alone instead of facilitating a deal, the PMS said not at all. The decision of Lloyds and HBOS to merge was a decision that they initiated, but they came to us in September because they needed changes to be made to the Competition Law in order to facilitate the merger. At the time we took the view that it was in the wider interest of the economy and wider interest of financial stability that this merger should go ahead and that remained the Government s view. This was a view that had widespread support at the time.

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Lloyds

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