UK business secretary hits back over bonuses

23 November 2010

British business secretary Vince Cable has fired back following suggestions that rules over banking bonuses may be toned down, criticising the sector's behaviour on the issue.

Chancellor George Osborne had hinted in an earlier interview that the UK may be unwilling to act unilaterally on limiting performance-related windfalls, but Mr Cable insisted that financial firms had acted recklessly in the run-up to the recession.

"Transparency is key to creating confidence in any commitment from our banks to behave more responsibly," he said in a statement. "Outrageous and irresponsible pay structures were a driver in our financial crisis."

The Liberal Democrat minister is believed to be in favour of imposing tougher restrictions and penalties on banks to prevent a repeat of the 2008 crisis and there have been long-standing rumours of a rift between him and Mr Osborne.

Last week, it was reported that HSBC was poised to double the salaries of some of its top investment bankers in an attempt to avoid the imminent introduction of rules on bonuses.

By Gary Cooper

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