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FSA pushes banks to curb bonuses after PPI scandal
The Financial Services Authority (FSA) is pushing banks to cut their bonus pools to reflect the heavy losses incurred through the mis-selling of payment protection insurance (PPI), according to the Financial Times.
The paper reported that the regulator is demanding banks take into account the multibillion-pound compensation bill for PPI mis-selling when they calculate pay-outs for 2011.
It said the FSA had been having robust conversations with the banks and had been pushing them hard to recognise PPI in their bonuses.
Pay discussions between the FSA and the big banks are set to continue over the coming weeks. The FSA told the FT it was ‘vigorously engaging’ with the banks to ensure they were not paying out large bonuses if they had not yet met tough new capital requirements.
The FSA does not have power to intervene on bonuses but reportedly believes that as bank shareholders bore the brunt of the charges through writedowns made in the first half of 2011, so too should bank staff.
23/01/2012 - citywire.co.uk