Keep up with the news by installing RT’s extension for . Never miss a story with this clean and simple app that delivers the latest headlines to you.

 

Bank of England: Financiers compelled to return bonuses for ‘misbehavior’

Published time: March 14, 2014 10:27
Edited time: March 14, 2014 11:00
The Bank of England.(Reuters / Toby Melville)

The Bank of England.(Reuters / Toby Melville)

UK “bad bankers” may be forced to return the last 6 years of bonuses, as the Bank of England is seeking to make top management more responsible for the lenders’ performance and avoid a repetition of the mis-selling and rate manipulation scandals.

The ruling would cover all the 1,700 firms authorised by the Prudential Regulation Authority (PRA), such as banks, building societies, credit unions, insurers and major investment houses.

It could come into force on January 1, 2015 and the clawback could be applied to awards made before that date but which are paid after, says the Bank of England.

Reasonable evidence of “misbehavior”, huge losses or a risk-management failure are among the reasons that can leave a banker without an annual bonus.

The new legislation if applied will become the most severe clawback provisions in the world, according to Tom Gosling, a partner at PwC.

“More than any other pay requirement introduced by regulators, this will create concerns for UK banks trying to compete in territories such as the US, Asia and even other parts of the EU, where such strict rules don’t apply,” the Financial Times quotes Mr Gosling.

“We have an objective to ensure the safety and soundness of the firms we regulate and we won’t allow remuneration schemes to exist that encourage behaviour likely to jeopardise financial stability,” Andrew Bailey, Deputy Governor for Prudential Regulation and CEO of the PRA said in a statement.

“This will provide a clear message to individuals of what is expected from them and the consequences of not acting properly,” he added.

The PRA proposal will be submitted for consideration to the Parliamentary Commission on Banking Standards after a two month consultation period.

British banking is facing a major overhaul, with such giants as RBS and Barclays massively cutting their staff and looking at other ways to reduce costs. Also, some of the country’s big lenders chose to increase multi-million pound bonuses to their top management.

Rate rigging scandals are also adding pressure on the country’s lenders, as some of the large banks like Barclays and RBS are facing huge fines for manipulating some of the benchmark rates ahead of the crisis.

Comments (11)

 

A Lang 17.03.2014 11:44

The perpetrators of the 2008 Global Economic Collapse are "financial terrorists.} Their collective crimes devastated more lives across the globe hitting more sovereign countries than any al Qaeda or other political terrorist cells. Claw back the money from these global terrorists, prosecute them for the laws they broke, and bar them from every working in the financial sector again EVER.

 

Frank 16.03.2014 12:18

Does anyone really think these proposed regulations will change anything? Just a few bribes behind the scene and it will be business as usual.

 

LABCR-TV 16.03.2014 10:41

Oh dear, what a relief. Now I can return that stolen Ferrari without facing court!

Seri ously, what a stinking copout!
Looks like a planned move to avoid the gallows for the banksters before the shite hits the fan. Interest rate rigging, exchange rate rigging, ratings agency rigging, precious metal manipulation, government data rigging (unemployment, GDP), this really stinks. All carried out under the snot filled noses of the Prudential Regulation Authority (PRA) and other redulators.
Now, even the application of the law is rigged beyond recognition. Disgusting!

View all comments (11)
Add comment

Authorization required for adding comments

Register or

Name

Password

Show password

Register

or Register

Request a new password

Send

or Register

To complete a registration check
your Email:

OK

or Register

A password has been sent to your email address

Edit profile

X

Name

New password

Retype new password

Current password

Save

Cancel

Follow us

Follow us