Glenis Willmott has criticised the government for trying to defend the bankers’ bonus culture.
New pan-European rules were finally agreed yesterday, with the UK being the only member state to try to defend the status quo by maintaining the current flawed system of extra hand-outs in the financial sector.
Glenis said: “The consensus reached last night between the European Parliament and the Council (the member state governments) toughens up the rules relating to bankers’ bonuses.
“Let’s remember why we need new rules in the financial sector. Activity within the industry led to banks being bailed-out with £5.2 billion losses, and fines of £1.1 billion for mis-selling. Yet those banks who had paid £390 million fines for Libor-fixing, for example, still paid over £600m in bonuses last year!”
“In 2010, the EU put in place rules ensuring that bonuses were deferred, that they could be clawed back and that cash bonuses were limited.
“The banks were told then to introduce a ratio between fixed salary and bonus elements. Their failure to do so has therefore led to the introduction of a compulsory bonus cap. A 1:1 salary to bonus ratio aims to put an end to the excessive risk culture which has led to taxpayer bail-outs and bank collapses.”
“These new rules are designed to make banks safer, more accountable and to ensure they focus on lending to the real economy. It’s a sad indictment on our own government, that they fought so hard to hang on to the bad old ways of doing business.”
