Darling warns bankers to avoid past mistakes
Darling warns bankers to avoid past mistakes
Friday 3rd July 2009
The chancellor has warned the consequences would be "disastrous" if bankers reverted to past practices amid signs of economic recovery.With recent claims of the return of the bonus culture among City workers, Alistair Darling said complacency was damaging and some bankers needed "to be brought back to Earth".
A White Paper set to be unveiled next week will give both the Bank of England and the Financial Services Authority (FSA) greater powers to intervene if companies began to offer pay increases and bonuses.
"There are people who are too complacent in my view," Mr Darling told the Independent newspaper, after reports that the expression "bonuses are back" was resurfacing in the City.
"Some ([banks] are only operating at all because of very substantial support from taxpayers, who are entitled to tell the government we must not repeat the mistakes," he added.
"If they go back to the way they were - to business as usual - without asking themselves over and over again whether they understand what they are doing, that would be disastrous for them and the rest of the world."
Though the chancellor stressed the White Paper would not propose legislation on bonus caps, he revealed the regulators would be given "new tools" with which to intervene should firms encourage risky practices through the offer of incentive schemes.
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