FINANCIAL SERVICES
Regulation only way to curb bonuses, says RBS chief
Regulation rather than self-imposed restraint is the only way to reduce City bonuses, the chairman of Royal Bank of Scotland told a summit called to consider how "values and trust" could be restored in the City.
According to a report in the Guardian newspaper, RBS chairman Sir Philip Hampton said: "My own view is it can probably only be decisively solved through regulation."
The Guardian also reports that Hector Sants, chief executive of the Financial Services Authority, described bonuses as the "lightning rod" of the public's lack of trust in bankers. He said: "I believe that unless bankers demonstrate sensitivity and exercise restraint trust will not be restored." Sants urged banks to consider "behavioural characteristics" when setting bonuses and called for boards to "show leadership".
Meanwhile, Paul Tucker, deputy governor of the Bank of England, suggested that bonuses could be paid in subordinated debt – that is, debt at risk of being worthless in the event of a bank's failure.
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Title: “Regulation only way to curb bonuses, says RBS chairman Sir Philip Hampton”, by Jill Treanor, The Guardian, 5 October 2010.
Availability: Read The Guardian article online at www.guardian.co.uk/business/2010/oct/05/bonuses-bankers-regulation-financial-crisis.