FSA Plan to Set Up New System
Monday, February 9, 2009 15:26
It has been repeatedly warned by experts in the field that the recession might get deeper and more prolonged than the economists have predicted.
According to the head of the City watchdog today, the FSA is working on a new way to police bank bonuses that will change the current way financial institutions reward their employees.
With the growing furore over bonus payouts at part-nationalised banks showing little signs of abating, Lord Turner of Ecchinswell, chairman of the FSA, announced that the regulator would try to help to stamp out the short-term attitude towards risk among the bankers. Linking high bonus deals to short-term profits is thought by a lot of people as helping to spur the current crisis.
Though it was not the work of the regulator to set absolute bonus levels for banks, the FSA would try to ensure that the companies it regulated put in place a reward structure that clearly linked bonuses to performance over the long term.
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