The Walker Report on the bonus shook the City
Banks in the City must follow the rules on bonuses strictest in the world, according to Sir David Walker, author of an official report presented Thursday to the government. The former president of Morgan Stanley has created a nice surprise in the City by requiring financial institutions to disclose how many employees earn more than one million pounds (1.1 million euros). He also wants to go further than the "code of compensation" which is being implemented by the supervisory authority of financial services (FSA) recommending to display up to five years to pay bonuses to bankers, with the possibility for banks to recover some money in case of trouble. These principles are closely following the agreement signed last September by the Heads of State and Government of the G20 summit in Pittsburgh.
The City thundered.Finance Minister Alistair Darling has promised, this Thursday, that "government would act quickly to implement reforms" proposed by Sir David Walker. For the proposed measures have a chance to be implemented before the next parliamentary elections should take place in early May 2010, will require that they be included at the last moment in the law reform of financial regulation which has just 'Just be submitted to Parliament. What will be difficult, but possible.
Risk of leakage of foreign talent
At the heart of the report, the transparency clause on salaries of more than 1 million books, which will be released in increments of 1 to 2.5 million, 2.5 to 5 million and more than 5 million, including trying to give shareholders more information on wage policies in force in the banks.According to estimates by Sir David Walker, over 1 000 employees of the City already affecting more than one million pounds per year, counting salary and variable bonuses. Even if we can not make public the names of best paid traders as is envisaged in the United States, this clause will cause howls of anger in the community bankers, was also accused the author of the report Thursday, the Financial Times.
Financial crisis or not, the very secret little world of the City that does not put his nose in his business bonus. Bankers fear that strict new rules do not flee the best foreign talent."It is essential that other countries adopt the same rules and at the same time, has warned Angela Knight, chair of the British Bankers Association (BBA).
Besides compensation, the Walker Report, released Thursday, reflects the recommendations already made this summer in a draft to strengthen the boards of banks. The members of CA should thus be better equipped to control both the financial risks and wage policies.
The Walker Report (pdf and English)
"The banks remain fragile in Europe