Critics round on banking bonus regulations
14th August 2009
Efforts by the Financial Services Authority (FSA) to regulate bankers' bonuses have come under attack today, as critics accused the regulator of fudging the issue.
The FSA unveiled its final regulations in a policy statement this week following a consultation with the industry, which included some key changes.
Firms have been given greater responsibility for governing remuneration structures of senior employees, while proposed rules on flexible bonuses are now expressed as guidance - something the FSA claims will avoid the UK suffering from 'competitive disadvantage'.
However, the changes have been seized upon by critics as evidence of a watered-down approach, with the GMB saying the new regulations were 'as watertight as a string bag'.
Liberal Democrats treasury spokesman Vince Cable echoed the comments, while Rob Moulton, partner at commercial law firm Nabarro, suggested 'the UK competitiveness argument is a bit of a weak one'.
'If we think the last 18 months has been good for the UK's banking and general economy then we are nuts,' he commented.
However, the FSA insists it is operating within its remit, whilst not undermining the industry, something which Mr Moulton agreed was important.
'They have got to be a bit careful that they don't do something that is just out of line with what the rest of the world does, because we can't pretend that UK industry is insulated from what goes on anywhere else.'