British Prime Minister has announced tough new laws to prevent a return to the "bad old days" of huge bank bonuses and will penalise companies which fail to comply
REUTERS - Britain plans tough new laws to prevent a return to the "bad old days" of huge bank bonuses and will penalise companies which fail to comply, Prime Minister Gordon Brown said on Sunday.
Speaking ahead of the annual conference of his ruling Labour Party that begins on Sunday, Brown also said there would be legislation to compel governments to reduce deficits by a set amount each year.
"Just as we will have a Fiscal Responsibility Act to deal with the public finances, we will come back and will have a new Business and Financial Services Act as well, that will ban the old bonus systems and make it impossible for firms to be able to use them," Brown told BBC television.
Brown said fellow leaders at the G20 meeting in the U.S. city of Pittsburgh last week had agreed banks were seeking a return to the big bonuses they paid out before the global credit crisis.
"They are all reporting to me that the banks are just anxious to return to the bad old days. Some of them are ready to announce big bonuses that are completely unacceptable."
The Group of 20 called for crackdowns on banker bonuses and sought a build-up in banks' capital bases.
Brown said new measures to be brought before parliament in coming weeks would be "the toughest action of any country in the world".
The prime minister is seeking to revive dire poll ratings ahead of a general election he must call by next June.
"Where there is bad behaviour the Financial Services Authority (FSA) will have the right to intervene and where companies are not prepared to act in a way that is consistent with all these new proposals about the fair treatment of bonuses and remuneration, there will be penalties imposed on these companies," he said.
The opposition Conservatives, on course to win the election, plan to abolish the FSA and give more regulatory power to the Bank of England.
The British government has a 70 percent stake in Royal Bank of Scotland and 43 percent of Lloyds Banking Group after bailing them out with billions of pounds last year.
Brown gave no more details on legislative plans to cut a budget deficit forecast to exceed 12 percent of GDP this year. The government has said it will halve the deficit over the next four years.
Date created : 2009-09-27