UK: G20 to discuss bank pay and bonuses

LONDON: British Treasury chief Alistair Darling said on Thursday that a crackdown on bankers' bonuses needed to be a concerted international effort and that the issue would be discussed at a meeting of G20 finance ministers here next month.

With rewards for excessive risk-taking and short-term gains blamed by many for the current financial crisis, Darling joined his French counterpart Christine Lagarde in leading a push among the Group of 20 nations to find a collective way to limit bonuses.
``Banks need to responsible about pay and bonuses and one of the things that is concerning me is that when you tackle banks about this they say that if you do something here, the Americans, the Swiss, or the French ... will poach our people,'' Darling told BBC radio.

``This is something that I think we do need to tackle overall and it will be discussed by the G20 finance ministers in September,'' he added.

Finance ministers from the Group of 20 leading industrial and emerging nations are due to meet in London on Sept. 4-5 to lay the groundwork for the heads of state summit in Pittsburgh on Sept. 24-25.

Britain's financial services watchdog has drawn up new rules on bankers' pay, but critics have argued they are too weak.

The proposed code by the Financial Services Authority includes plans to stop bankers from getting bonuses at high multiples of their salary or bonuses guaranteed for more than a year. Banks that fail to comply could face higher capital charges or other punitive action.

Lagarde said on Monday that what governments needed to ``collectively eradicate is this rat race, the race for bonuses'' and find a common path ``allowing us to avoid being in systematic competition.''

Darling said he wants to see increased competition in the banking sector in Britain after a significant reduction in the number of lenders in recent years.

``We need more competition and that's something we intend to encourage,'' he said.