Downing Street Says » Bankers Bonuses

» Tuesday, December 15, 2009

Bankers Bonuses

Asked for the Prime Minister’s views on how the City was behaving at the moment, the PMS said that the important point to bear in mind was that this piece of policy was as much about behaviour change as it was a bout the principles. We wanted to see a competitive and healthy banking industry, but there were some new principles that had been set out about bonus structures.

If, as a result of the legislation, the pattern of bonus payments changes, then that would be something to be welcomed, as this underpinned the principles the Prime Minister had set out. That included moving away from cash bonuses, claw-back and employees having a long-term investment in their company.

President Sarkozy was considering something similar in France, there was political support from Chancellor Merkel and President Obama had had discussions with senior banking officials in Washington. So this continued to be an international issue.

Put that it could be the view of some banks that they would keep paying bonuses but also pay tax as well, the PMS said that it was early days; HMRC were there to talk to banks about the detail. The Government thought it was the right thing to do and behaviour change was an important part of it.

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