Britain’s state-controlled banks will be issued with a blunt word of warning from Nick Clegg regarding irresponsible bankers’ bonuses.
Britain’s state-controlled banks are due to be issued a blunt word of warning from Nick Clegg. They will be faced with hard-hitting restrictions if they attempt to bring in “irresponsible payments” during the forthcoming bonus season.
The deputy prime minister will announce there will be no ease on clamping down on bonus payments, whilst George Osborne and Vince Cable press on with plans to prevent future state bailouts.
The intervention will be announced by Clegg in a speech prior to the chancellor and business secretary backing a report by Sir John Vickers, that proposed lenders should be forced to ring-fence their retail and investment banking arms. It is expected that Osborne will state that a settlement needs to be agreed with the City in order for London to remain a global financial centre, without the rest of the economy put at risk.
Clegg will make it clear that the government will take a tough position if state – controlled banks pay substantial bonuses. “The profound impact of the banking implosion on our economy, and on our society, has since become even clearer. There has been no lessening of public anger towards the banks – and there will be no let-up in the government’s determination to keep the clamps on bonus payments. So, on the eve of bonus season, let no one be in no doubt about our determination to use our clout as the major shareholder in these banks to block any irresponsible payments, or any rewards for failure.”
Ministers are soon to begin discussions on how to limit bonuses for state- controlled banks. Clegg is convinced that the government will replicate last year’s restrictions if the banks decline to agree.