Big UK banks look to draw up agreement on bonuses, report shows

26 November 2010

Four of the biggest financial institutions in the UK are working together on drawing up a strategy to reduce the amount paid in bonuses, a newspaper report has revealed.

According to the Times, professionals from the likes of Standard Chartered, HSBC, Barclays and the Royal Bank of Scotland are believed to have held discussions over the issue of remuneration.

The banks are thought to be planning on releasing details of the proposals before Christmas, which are expected to call for a cap on the total amount of bonus payments rather than individual pay-outs to staff.

Further plans are expected to unveil a total figure to be distributed among small-to-medium sized enterprises during 2011.

The Financial Services Authority is thought to be taking part in the talks with banking representatives.

Meanwhile, the coalition government is thought to be divided over potential amendments made to proposals surrounding the disclosure of the details of those bankers earning more than £1 million.

George Osborne, chancellor of the exchequer, is reported to be looking to dilute the proposals if an international consensus from other authorities is not forthcoming.

However, Vince Cable, business secretary, believes this option would be too soft an approach to take with financial institutions.

“Outrageous and irresponsible pay structures were a driver in our financial crisis,” he explained.

By Jim Ottewill

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