THE TELEGRAPH: Bumper annual cash bonuses for bankers could soon be outlawed after finance ministers from around the world ordered a major overhaul of the industry's pay system.
In a move which may foreshadow new legislation over compensation in the City and Wall Street, ministers meeting in Washington threw their weight behind a report which said banks' generous compensation structure was partly to blame for the credit crisis.
The Financial Stability Forum, a union of regulators from around the world, said the current system - in which bankers are frequently paid million pound-plus bonuses based on their annual performance - needed urgent reform.
Amid a raft of other recommendations, including an overhaul of the way ratings agencies work and a beefing up of the Basel rules on banks' accounts, the FSF said remuneration should be tied to performance over credit cycles, which last five or more years.
This could raise the prospect of bankers having to wait many years for bonuses, or even be forced to forfeit them if the bank's performance later disappoints. Ministers Say Bonus Culture Has to End >>> By Edmund Conway, in Washington | April 14, 2008
The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)
