Darling ready for battle on bonuses
CHANCELLOR Alistair Darling will put himself on a collision course with City bankers this week, with the release of a white paper on regulation that will seek aggressive curbs on remuneration.
The chancellor’s vision of a new regulatory system, which could be unveiled as soon as Wednesday, will not include changes to the tripartite structure of the regulatory system.
But Treasury sources said that the paper would “leave no stone unturned” when it came to cracking down on the bonus culture.
Darling said yesterday that banks had “behaved in a kamikaze manner” and had not understood the risks involved in some of the products they traded.
His white paper will include measures to force banks which pay out bonuses based on short-term targets to hold more capital than their rivals.
More radical proposals, such as splitting retail and so-called ‘casino’ investment banking, have been rejected, according to Treasury sources.
Some City banks are about to reveal healthy bonuses.