In spite of the government initiated curbs on payments of bank bonuses, it is learned that billions of pounds are to be given away as bonuses in 2011.
According to Robert Peston, BBC business editor, the best thing the coalition can hope is a declaration from the bankers volunteer to give lesser bonuses without the involvement of the government.
Big bonuses by banks are openly opposed by Business Secretary Vince Cable. He reportedly said that the government is ready for robust action on curbing bonuses.
It is the wish of the government that banks should lend more to small businesses.
As per the reports, a senior bank official says that banks may not come forward with a solid declaration on reducing bonuses. Some reports say that salaries of bank employees are up by up to 40 percent, effectively buffering any cuts in bonus payments.
Insiders say that banks are in the process of adjusting pay packages as per the new rules coming into force throughout Europe. The rules were agreed upon last month. The rules are aimed at reducing short term risk taken by the bankers. Short term risk is the alleged reason for the recent financial crisis.
The government had to bail out some banks by injecting billions of pounds in banking sector. As such, some say that the government’s stand on curbing bank bonuses should be positively considers by banks.
The banks are against bonus curbs saying that they may lose employees to foreign banks. The government is asking the banks to lend more to small businesses in the hope that small businesses can boost economy.
Short URL: http://www.reporterslive.com/?p=3086
Posted by ashi1564
on Jan 11 2011. Filed under Breaking News, Business.
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