FSA 'wants more detail over bankers' pay'

11 November 2010

British industry watchdog the Financial Services Authority (FSA) looks set to demand more extensive details of bankers' salary and bonus arrangements as part of its ongoing financial overhaul.

Yesterday (November 10th 2010), the organisation signalled its intention to ask banks and financial services firms to provide information relating to remuneration packages, with a series of other reforms due to come into effect from next year.

The FSA stated that different levels of disclosure will be implemented depending on the size of individual companies, with particular pressure set to be applied on the UK's 26 leading financial businesses.

Cash bonuses have already been restricted in some areas of the financial sector following the intense criticism the industry received for its perceived role in the global economic downturn, but these new rules are expected to go much further.

In addition, British chancellor George Osborne has already confirmed that the country's government will impose a levy on banks for four years starting in 2011 and sought to defend the coalition's record on financial regulation.

According to Reuters, the Conservative minister insisted in an interview with the Times that the UK's banking sector will not be hit by the same kind of turbulence recently witnessed in countries such as Ireland, Spain and Greece.

"People are talking about other countries in Europe at the moment, they are not talking about Britain," he said during a trip to China. "I think the British banking system is now well-capitalised - we are aware of all the risks."

Mr Osborne also claimed that the Tory-Liberal Democrat alliance had been forced to take swift action to bring Britain's financial companies into line and said his administration would have been "in the firing line" had it not done so.

The chancellor added that July's stress tests - which assessed the ability of European banks to cope with a second financial crisis - had proven UK institutions to be "remarkably well-placed" when compared with some overseas operations.

Earlier this week, it was revealed that London-based banking giant Barclays had set aside £1.6 billion ($2.58 billion) to cover the cost of staff bonuses, with the majority earmarked for workers at Barclays Capital, its investment banking arm .

Following the announcement, Barclays corporate and investment banking co-chief executive Rich Ricci told the Independent that the group had attracted a "bumper crop of talent" in spite of post-recession bonus regulations.

By Gary Cooper

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