
UK calls for greater global regulation and curbs on executive pay
British prime minister and chancellor of the exchequer indicate they will be looking at how to develop global regulation in the wake of the financial crisis
MANCHESTER, UK – British prime minister Gordon Brown, in his speech at the Labour party conference this week, hinted new regulation should be introduced to curb “City excesses” and “risk taking”. Brown called for more transparency surrounding the decisions taken by bank directors and also criticised the City’s bonus culture, which he said should be based on hard work, effort and enterprise, not short-term speculative deals.
A more muted response on the issue of executive pay came in a speech from Alistair Darling, the chancellor of the exchequer, earlier this week, who said he would "look at" the culture of big bonuses that encouraged short-term risk-taking. The issue of excessive executive pay is one of the sticking points delaying approval of the Paulson Plan being debated in the US Congress at the moment. It is still unlikely governments will be able to legislate on private firms’ remuneration packages, but the current highly volatile situation could push some kind of reform on this issue through. The new chairman of the Financial Services Authority, Lord Adair Turner, commented it would continue to scrutinise bonuses and act on banks if they are not realistic about pay structures.
Both men have emphasised the need for a global solution to the latest financial crisis, and Brown also hinted the UK should think about moving away from a principles-based financial regulatory system to a more US-style rules-based system. Ironically, before the latest crisis erupted, the US had been pushing for a more principles-based and centralised system. This indicates not only the lack of any clear direction at the moment in either country but also the propensity for politicians to favour tough, knee-jerk reactions in crisis situations. The US is experiencing this right now, with Congress being pushed to adopt the Paulson Plan by this Friday.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
US Basel equivalence questioned as EU patience wears thin
MEPs say unfaithful US implementation of Basel III could trigger review of access to EU markets
The Term €STR transition: challenges and market readiness
The progress, challenges and factors shaping the adoption of Term €STR as financial institutions transition from Euribor
CFTC takes red pen to swaps rules, but don’t call it a rollback
Lawyers and ex-regs say agency is fine-tuning and clarifying regulations, not eliminating them
EU edges closer to calming FRTB fund-linked fray
Dealers say temporary solution is a step in the right direction but won’t fully resolve all issues
European Commission changes tune on proposed FRTB multiplier
Banks fear departure from original diversification factor undermines case for permanent relief
Supervisors should be mindful of geopolitical risks, says IMF
Shock events cause sizeable swings in asset pricing, institution’s latest report highlights
Bowman won’t commit to stress-testing the tariff shock
Nominated Fed vice-chair stonewalls calls to run ad hoc scenario similar to 2020 Covid test
Fed’s Bowman to ‘prioritise’ SLR exemption for US Treasuries
Reinstating Covid-era relief is a ‘no brainer’, dealers say, as bond markets reel from tariff chaos