Government must adopt tough rules for banks

Arlene McCarthy

Commenting on the recommendations of the Commission on Banking Standards published today, Labour's European spokesperson on banking, Arlene McCarthy, said the Government must adopt tough rules for banks.

"The Government has a prime opportunity to swiftly incorporate these recommendations into EU law and proposals on the table and in the pipeline.”

"In fact, tough EU rules came into force in the UK in 2011 introducing big changes to bonuses including caps on cash bonuses, bonus claws backs and deferrals, paying 50% of bonuses in shares, bonus caps to salaries, requirements to set up remuneration committees and publication of pay and salary levels.”

"So far the Government has only implemented minimum standards. They did not take up the option provided in the EU rules to stop bonuses in bailed out banks.”

"Yesterday the Economic and Monetary Affairs Committee in the European Parliament went further by voting for bonuses to be deferred until retirement, as well as calling for EU-wide rules to strengthen personal liability and accountability of bankers. In the wake of the Libor scandal, the EU plans to introduce permanent bans for bankers committing market abuse, as well as tough fines and jail sentences in the legislation I am drafting.”

Arlene rejected comments by an ex-bank chief who describe the proposals as unworkable: "We are now used to bank chiefs opposing change and rejecting rules and this is the reason we have had to rely on regulation to restore trust and integrity.”
"We have already demonstrated with the EU laws, that we have brought forward in the face of their continued opposition, that legislators can and will act where banks fail.”

"The Government now needs to act and match its tough talk with tough action and take the opportunity to introduce these rules by the summer recess."