Banking executives will have their pay linked to long term profitability under new rules designed to prevent a repeat of last year's financial meltdown. Alistair Darling will tell MPs today that salaries will be aligned to the earnings and overall financial health of institutions when he presents his long-awaited reforms to the system of banking regulation. Typically, top bankers are paid a fixed basic salary topped up with bonuses linked to their bank's share-price performance. Such arrangements can encourage excessive risktaking and often do not reflect the quality of the bank's balance sheet. The Chancellor will also announce that the Financial Services Authority (FSA) will cap how much a bank can lend during the good times to ensure that it is not overstretched when the economy deteriorates.
Banking executives will have their pay linked to long term profitability under new rules designed to prevent a repeat of last year's financial meltdown.
Alistair Darling will tell MPs today that salaries will be aligned to the earnings and overall financial health of institutions when he presents his long-awaited reforms to the system of banking regulation.
Typically, top bankers are paid a fixed basic salary topped up with bonuses linked to their bank's share-price performance. Such arrangements can encourage excessive risktaking and often do not reflect the quality of the bank's balance sheet.
The Chancellor will also announce that the Financial Services Authority (FSA) will cap how much a bank can lend during the good times to ensure that it is not overstretched when the economy deteriorates.
I don't mind politicians lying, I expect it. But it's disheartening to realise the depth of the contempt to which our lords and masters regard us by thinking that we'd accept this. keep to the Fen Causeway
