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Recent News
Payment Protection Insurance: a brief history
As companies recognised how profitable the product was, they began to push sales even though they were of questionable value for many customers. Concerns grew in 2008 after the consumers group Which? reported that one in three PPI customers had bought “worthless” insurance.
It was not until 2005, when the Financial Services Authority took over the regulation of the sale of general insurance, that the backlash against PPI gathered pace.
The City regulator said it planned to make PPI one of its immediate priorities and issued its first report on the product later that year. In the report, it identified poor selling practices and lack of compliance controls in PPI market following company visits and mystery shopping exercises.
Lloyds becomes the first bank to strip executives of bonuses
Lloyds Banking Group is to be the first bank to strip executives of part of their bonuses since the start of the financial crisis.
The bailed-out bank is to take back a total of more than £1million from its former chief executive Eric Daniels and four other current and previous senior directors under new clawback provisions.
The move will prompt calls for other banks to follow suit.
It is understood to come on the orders of Lloyds chief executive Antonio Horta Osorio.
Earlier this year he volunteered to give up his bonus of up to £2.4 million because he had taken a leave of absence due to exhaustion and felt bosses’ rewards ought to reflect hardships suffered by customers during the downturn.
FSA guidance for banks on PPI is ‘not achievable’
The guidelines released by the Financial Services Authority for remediation of mis-sold payment protection insurance do not “look achieveable”, according to software provider Charter UK has argued.
According to the company, which specialises in complaint and feedback management software, UK banks and other financial services organisations will not be able to meet PPI remediation guidelines without “significant, rapid investment in systems and processes”.
Amid outrage, Barclays pays bonuses
Barclays handed out £1.5 billion in bonuses to investment bankers for last year - although the lender slashed the pot by 32% amid mounting pressure over the controversial payouts.
Providing more disclosure on bonuses in its annual results than ever before, the bank said the average bonus for staff at investment arm Barclays Capital was cut by 30% to £64,000 in 2011 while the the group total bonus pool was down 25% at £2.2 billion.
RBS boss Stephen Hester on the row that saw him give up £1m bonus
Royal Bank of Scotland chief-executive Stephen Hester said today it would have been ‘indulgent’ to resign in a row over his £1million bonus.
Mr Hester - who earns £1.2million a year - said pay fairness should not be achieved by ‘cutting down success.’
He caved in and waived a near £1million performance payout for 2011 after intense public and political pressure.