Vince Cable: ‘Banker bonuses need international and domestic regulation’

29 November 2010

Limiting the amount of money paid to bankers in bonuses will require a combination of both international and domestic regulation, the UK’s business secretary has claimed.

Vince Cable told BBC Radio 4 that he was not “persuaded” that financial institutions realised they need to implement caps on bonuses.

If banks do not react to government pressure, then it could be deemed a “major provocation”, especially as the authorities has implemented recent cuts to the public purse, the politician explained.

He told the news provider: "I've launched a consultation in my own department on corporate governance that takes in issues of remuneration and disclosure, and it may well be that that's a better way of tackling it.

"I wouldn't just cover banks, but highly paid executives in general. But we have to have a system whereby executive pay is available to shareholders so they can make proper decisions from it."

A previous report by Sir David Walker, former chairman at Morgan Stanley, proposed implementing new rules to insist that banks reveal details of individuals with salaries of more than £1 million.

George Osborne, the current chancellor of the exchequer, recently suggested that the UK needs to implement the reform at the same time as other nations rather than acting “unilaterally”.

By Jim Ottewill

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