Banks urged to be “very sensitive” over bonus payouts

22 October 2010

Banks and financial firms need to be “very sensitive” when deciding how much to pay their employees, a business head has urged.

Richard Lambert, director-general of the Confederation of British Industry (CBI), made the comments before the organisation’s annual conference, which starts on Monday (October 25th).

Financial institutions should be aware that any announcement they make in relation to bonuses may have a political impact, especially following the unveiling of cuts being made to the public purse by the coalition government earlier in the week, the business chief explained.

Mr Lambert, who was quoted by the Press Association, said: "Banks are going to have to be very very sensitive in the coming months. If they just press ahead with substantial bonuses at a time when public sector workers are being laid off, there will be political consequences. They will be soaked in some way."

However, the director-general also emphasised the importance of the banking industry to the UK’s competitiveness on the global markets as well as to “hundreds of thousands of jobs” within the British economy.

Earlier in the month Mr Lambert advised banks to tread cautiously when announcing remuneration levels for staff.

“Carrying on with business as normal would seem arrogant and out of touch,” he warned.

By Jim Ottewill

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