As readers of HR Case Studies will be aware, pressure has been mounting for government intervention on the payment of excessive bonuses, particularly to bankers. Apparently Gordon Brown has now said that "enough is enough" when it comes to the old system, and he is threatening to "ban the old bonus system" and force banks to act in a more responsible manner.With rhetoric reminiscent of Dirty Harry, the PM is promising to “clean up the system once and for all," with tough new measures which will "represent the toughest action of any country in the world. We are not going to stand by and return to the bad old days,"
The next few weeks will therefore see the introduction of (quake in your boots, all you bankers) a new Business and Financial Services Act. It’s claimed that the act will "ban the old bonus systems and make it impossible for firms to go back to using them."
Brown to "ban old bonus system"
- Who are the organisations and campaign groups who have been urging for a change in legislation on bankers' bonuses?
- What progress has been made by other countries on this issue?
- Is it feasible for such legislation to be imposed, or can the end to the existing bonus system only come through self-regulation within the finance sector?
- Update No. 1: Alistair Darling adds his voice to the demand for an end to the bonus culture. Cut bonuses, Darling tells banks
- Update No. 2: Robert Peston offers thought-provoking insight to the changes to the bonus system. Labour bets on bashing bankers
Who’d have thought it – Mr Brown as Dirty Harry!
ReplyDeleteGiven the track record of the FSA, it will be interesting to see how the government plan to ensure that the changes are adhered to. I’m not sure that self regulation is the answer as the ability of financial institutions to do things by the book has been some what brought into question over the past few years (with a few notable exceptions).
In the words of Dirty Harry, the bankers needs to ask themselves one question: “Do I feel lucky?” Well, do ya, punk?
And Graham, if Gordon is Clint, does that mean Alistair is Clyde?
EBTG