Labour backs bankers’ bonus caps

bankingIn Strasbourg today, MEPs voted overwhelmingly for new regulations that will make banks safer, more accountable and help them to focus on their essential role of lending to the real economy.

Welcoming the vote, Glenis Willmott, Leader of Labour’s MEPs Labour Euro MP, said: “76% of people in a recent poll said they wanted a cap on bankers bonuses, and we’ve delivered that.”

But she was critical of the UK government who opposed the reforms.

She said: “The Conservatives showed that they continue to defend the pay and salaries of the highest paid, while ordinary working people pay the price for banks’ excessive risk taking.”

In 2010, Europe introduced rules making sure bonuses were deferred and could be clawed back, and also that bonuses in cash were limited.  The banks were told then to introduce a ratio between fixed salary and bonus elements.

Glenis said: “They failed to do so, and it was that failure to self-regulate on bonuses or to exercise restraint that has now resulted in a bonus cap.   The salary to bonus ration will be 1:1, or 1:2 if agreed by shareholders.

“These rules will put an end to an unsustainable banking model where the UK bank RBS which is 84% taxpayer owned, while suffering £5.2 billion losses, £1.1 billion fines for mis-selling for payment protection insurance and £390 million fines for Libor-fixing, were still paying over £600 million in bonuses. This is neither ethical nor sustainable.

“People want action so that we put an end to the excessive risk culture which lead to taxpayer bail-outs and bank collapses.  To fail to support these changes, the Conservatives have shown they are isolated and out of touch.”

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