British politicians and the Bank of England have stepped up pressure on UK banks over big bonuses.
Just hours before the country’s financial regulator released new guidelines on pay, Britain’s deputy prime minister Nick Clegg warned banks the government will respond unless they trim bonus payments and increase their lending to small companies.
Clegg said the banks “don’t operate in a social vacuum.”
Britain has now fallen in line with the rest of the European Union in introducing the world’s toughest bank bonus curbs.
The Financial Services Authority published an updated remuneration code that will affect 2,700 financial firms it regulates from January just as the 2010 bonus round is underway.
The British Bankers’ Association responded by saying the sector contributes chunky tax revenues to the UK treasury and the country’s banks should not be put at a competitive disadvantage to rivals outside Europe.