PM promises bank bonus reform

Tuesday 1st September 2009

Gordon Brown has pledged to take tough action on excessive bank bonuses, saying banks should 'claw back' bankers' rewards if they performed poorly.

In an interview with the Financial Times (FT) Mr Brown said the world could not afford to return to 'business as usual', saying pay and bonuses should be linked to longer term results.

He told the FT there must be international coordination on the issue, with the G20 expected to discuss bonuses at a meeting later this month.

"I think you've got to be absolutely clear that remuneration has got to be based on long-term success, not short-term speculative deals," he said.

"There's got to be a clawback system in remuneration itself so that if things are not working in year two then there is a clawback that is possible as an example."

Nicolas Sarkozy, the French president, is expected to call for a mandatory cap on bonuses at the G20, but Mr Brown rejected the idea, saying such a cap would be "very difficult to enforce in an international environment".

However, Mr Brown did offer some hope, and said it was important London remained a world financial hub. He said: "There's definitely been an improvement since April against what people forecast and, as far as the British economy is concerned, I would say that we are cautious but we're cautiously optimistic about the future."

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