The government has again threatened to get tough with bankers who take reckless risks by giving more power to the Financial Services Authority (FSA).
City minister Lord Myners said the Financial Services Bill will be part of the Queen’s Speech – which sets out legislative plans for the coming year – on Wednesday (18 November).
Myners said the changes would not involve setting a cap on bankers’ bonuses. But the FSA would get the power to stop excessive payments and to cancel any pay packages that appear to reward undue risk-taking.
He said: “We are going to make it very clear that contracts which contain bonuses clauses that will add to risk or contracts that guarantee bonuses for several years are no longer acceptable and, if those contracts are written, they will be voided under law.”
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The measures would not be retrospective and apply only to future contracts.
The British Bankers’ Association warned that these changes could threaten the UK’s future as a major global centre for finance.
