A POWERFUL group of international financial regulators has proposed that the payments made by banks to senior management, risk management staff, traders and other "material risk takers" be made public for the first time.
The statement, from the Basel Committee on Banking Supervision, adds significantly to the pressure on the Government to force the British banks to publish details bank bonuses. Over the next few weeks around £7bn is expected to be paid out in bonuses, at a time when the public is being asked to accept benefits cuts, a threefold rise in student tuition fees and a hike in VAT to 20%.
So far the Chancellor George Osborne has resisted calls for the banks to disclose what they pay their top people, arguing for a European agreement first. The Business Secretary Vince Cable meanwhile has said he supports a tax on bonuses as a last resort, and also backs the idea that individual bank staff who earn more than, say, the Prime Minister should have their pay and bonuses revealed. Talks between ministers and the banks on this politically explosive issue continue.
Excessive risk-taking, "off balance sheet" deals and bonuses paid "just for turning up" were almost universally held to be at least partly responsible for the financial crash and the deepest recession in three-quarters of a century which followed it. Regulators have now come up with draft proposals that should represent a united international front in the campaign to restrain the banks from irresponsibility.