Business News
Brown urges action on bonuses but cool on Franco-German proposals
Sep 1, 2009, 7:52 GMT
London - British Prime Minister Gordon Brown Tuesday called for action to curtail excessive bonuses for bankers but indicated that he did not back Franco-German proposals on the issue.
In an interview with the Financial Times, Brown said any action on bankers' remuneration should be part of an international effort to rectify the 'systemic weakness that led to the global financial crisis.'
However, Brown was 'unenthusiastic' about French-led pressure for a mandatory cap on bankers' bonuses, said the Financial Times, which he believed would be 'difficult to enforce.'
Brown also failed to back a recent proposal by Adair Turner, the head of Britain's Financial Services Authority (FSA) for a tax on bankers' transactions.
According to Brown, pay and bonuses should be based on long-term success and not short-term speculative gains. Banks should 'claw back' bankers' rewards if their performance suffered in subsequent years and regulators should be able to impose higher capital requirements on financial institutions.
While it was now clear that the banking sector had 'overheated', it was vital to safeguard the status of the City of London as an international financial centre, he said. But Britain could not be expected to act unilaterally.
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