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Minister urges bankers to forego bonuses
February 9, 2009 / 8:38 AM / 9 years ago

Minister urges bankers to forego bonuses

LONDON (Reuters) - Senior bankers have a “moral responsibility” to reject their bonuses this year if they lost money during the credit crunch, although the government will not immediately force them to do so, a senior minister said on Monday.

Chancellor Alistair Darling (R) holds a copy of his Pre-Budget Report during a meeting with Chief Secretary to the Treasury Yvette Cooper in his office at the Treasury in London, November 23, 2008. REUTERS/Carl Court/Pool

Chief Secretary to the Treasury Yvette Cooper said it would be difficult to compel banks to scrap all bonuses because some staff have extra payments written into their contracts.

Reports of big bonuses for banks that were saved from collapse by billions of pounds of public money have provoked an angry response from some politicians and the media. However, it is too soon to follow the lead of U.S. President Barack Obama and put a mandatory cap on bankers’ pay, Cooper said.

”Even where there may be legal obligations, bonuses should be minimised this year,“ Cooper told BBC radio. ”Senior executives themselves need to take responsibility and consider whether they should be taking bonuses.

“For those senior executives even where they have legal obligations, I think there is a moral responsibility on some of these bankers, even if they are legally entitled to take bonuses at a time when the bank is only still standing because of government intervention.”

Chancellor Alistair Darling has said he plans an independent review of banks’ management and bonus structure.

The Sunday Telegraph reported that the Royal Bank of Scotland plans to pay out nearly 1 billion pounds in bonuses this year, even though it has just posted the biggest-ever financial loss for a British company. Britain’s deepening economic downturn has caused the Labour party’s popularity to slump and a majority of voters think Darling should quit, according to an ICM poll in the Sunday Telegraph.

Reporting by Peter Griffiths; Editing by Ruth Pitchford

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