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article imageBanks Hit Back Over Calls to Ban Big Bonuses

By Jerry Kennard     Aug 15, 2009 in Politics
Banks underpinned by Government guarantees should be banned from the big bonus culture states shadow chancellor George Osbourne.
Banks however have hit back at the comments claiming pay rules are already tighter than in any other country.
Speaking to the Guardian newspaper, George Osbourne said, It is totally unacceptable for bank bonuses to be paid on the back of taxpayer guarantees.
Osbourne's comments follow the apparent failure of banking regulators to curb the big bonus culture, widely considered to have helped fuel the recession. He recently attacked the £9.6 million award to Stephen Hester, new chief executive of the partly nationalised Royal Bank of Scotland.
Liberal Democrat Treasury spokesman, Vince Cable, supported calls for greater restraint. It is fundamentally wrong for the people to be rewarding themselves with bonus payments when they’re dependant on Government underwriting. The banks are doing well because the Government has rescued them, said Mr Cable.
Mr Osbourne says the responsibility for financial regulation should be moved from the Financial Services Authority (FSA) and passed to the Bank of England. However, a spokesman for the FSA reported on the BBC News Channel stated, If more is needed by politicians then governments need to act through a further act of parliament. We are not a moral regulator. If there's an issue, MPs should change the existing law or the mandate given to the regulator.
Lord Mandleson the Govt Business Secretary accused George Osbourne of being a crowd pleaser. He [Osbourne] and the Tories had nothing to say on the subject of bonuses to FSA during their consultation on the subject but because he was being interviewed by the Guardian, he says what he thinks Guardian readers want to hear.
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