The City has responded to Alastair Darling’s plans to restructure bankers’ bonuses, claiming that his plans will undermine the financial services industry.
The chancellor said yesterday that he will legislate to ensure that City bonuses are structured to reward long-term success, in a bid to prevent a repeat of last year’s financial crisis.
But senior City executives have told the Financial Times that Darling’s comments were an obvious attempt to pander to “anti-banker” sentiment.
Tim Linacre, chief executive of stockbrockers Panmure Gordon, said: “It’s just politics. There’s nothing new in it at all.
“Most banks have already changed the way they are working. This is just a political rehash.”
British Bankers’ Association chief executive Angela Knight said: “We have been working for some time with the Financial Services Authority (FSA) on rules covering pay and bonuses, but which balance the need to attract and retain the kind of very mobile staff UK banks need to stay competitive.”
A remuneration code drafted by the FSA is due to take effect in January. It covers many of the issues mentioned by Darling, including the deferral of bonuses, and linking payment to long-term performance objectives rather than short-term profits.