THE TELEGRAPH: The treasury is planning to control of [sic] banking bonuses as the price for the insurance scheme for bad debts unveiled last week.
Banks that ask the taxpayer to insure their “toxic” assets will have to sign legal documents committing them to introducing “long-term” pay structures that may signal a halt to the bonus culture.
Details of the agreements that banks, including Barclays and Royal Bank of Scotland, will be asked to sign are still being drawn up, but sources close to the Treasury said the terms were likely to be stringent.
The Government has come in for embarrassing criticism over its decision to prefer the complex insurance scheme over setting up a “toxic bank”. The decision, which was announced on Monday, was made following advice from Credit Suisse, the investment bank, but The Sunday Telegraph can disclose that, just two days later, analysts from the same bank told their clients that their “preferred solution” was a government-funded “bad bank”. >>> By Mark Kleinman and Patrick Hennessy | Saturday, January 24, 2009
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