Bonuses "will not be capped" - Myners

By Stefano Ambrogi

LONDON (Reuters) - Financial regulators have no intention of capping bankers' bonuses under new powers planned to curb big payouts that drive excessive risk-taking, Financial Services Minister Paul Myners said on Sunday.

Myners was trying to clarify what the reforms would mean after Chancellor Alistair Darling said in a newspaper interview the Financial Services Authority will soon have the power to "tear up" bankers contracts.

"We're not capping bonuses because once we start capping bonuses in one sector, we're on to a slippery slope," Myners told Sky News in an interview.

He said senior people in banking are "very keen that we should do these things."

"We are going to make it clear that contracts which add bonus clauses that will add to risk, or contracts that will generate bonuses for risk-takers are no longer acceptable," Myners said.

"What we're doing is ensuring that banks no longer have bonus and incentive arrangements in place which contribute to excessive risk-taking. We're seeking to de-risk the system."

He said the responsibility of ensuring compliance would pass to the board of directors and the shareholders. The laws would also only apply to future employment contracts, he said.

"If they don't get these things right, then we may have to revisit the issue."