Bonuses 'need to be controlled'
Bonuses for bankers need proper controls to prevent them from taking excessive risks, the British Bankers Association (BAA) has said.
Brian Capon, a spokesman for the organisation, noted that not everyone in the banking industry received bonuses but it was still important to set limits on how workers at different levels of career development were paid.
"Big money bonuses have only ever applied to a very small number of staff, but we believe in proper controls and sensible measures with rewards related to long-term performance," he said.
Mr Capon added that his organisation supports proposals for bankers' remuneration outlined in a Financial Services Authority (FSA) consultation last month, which suggested that any policies related to bankers' pay should be rolled out globally.
"The FSA has published its proposals which we support and we would welcome the equivalent principles being recognised internationally and in Europe," he concluded.
Figures from the Office for National Statistics published yesterday (Wednesday, April 22nd) suggested that a drop in bonuses in the banking sector had brought the average year-on-year growth in earnings to 0.1 per cent in February.
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History has shown that with every giantantic scandal or economic event - regulation has following to try and fill up the holes. Such as Sarbanes and Oxley Act in US after Enron. I'm sure controls for bankers bonuses will tighten up that area of corporate governence soon.
History also shows that regulation is usually over zealous and an over reaction to the circumstances that inspired it. Unfortunately it's much harder to strip back red tape than it is to put it in place.
It also shows that the additional rules and red tape that goes with it doesn't work and ways are found to circumvent them - just as the richest people always find ways to reduce their tax bills despite governments best attempts.