One of the UK's top bankers has admitted that “mistakes were made” within the industry, as he vowed to restrict bonus payments.
Bob Diamond, president of Barclays, said banks had done a “pretty poor job” of managing the bonus process and that his firm would be deferring up to 60% of payouts — more than double the usual levels.
He said: “We (the whole banking sector) have done a pretty poor job of managing how the (bonus) process works.
“We do agree that many functions should have a higher portion of fixed and a lower portion of variable.”
Mr Diamond warned that a regulatory crackdown on bonus payments could see banks base themselves somewhere other than London, currently one of the two main global financial centres along with New York.
“I don't think there is any city in the world that has been more of a symbol of global trade than London, and London has also been a very big beneficiary of its status as a global trading centre.” Asked if that status was at risk, he said: “There is always a risk.”
“Clearly there were mistakes made and I've made mistakes.
“This isn't about anyone saying I don't have to be part of the solution. It is quite the opposite, it is about saying I do want to be part of the solution.”
Last week the Government unveiled a bank bonus supertax which will see the institutions pay 50% tax on all individual payouts above £25,000.
American Mr Diamond — who was paid more than £20 million in 2007 — waived his bonuses last year and declined to say what would be happening for 2009.