Treasury to ask global banks operating in Britain to rein in bonuses

Treasury minister Lord Myners will today hold a crunch meeting on bonuses with all the biggest foreign banks operating in London.

He wants to press them to agree to a 'level playing field' on pay and bonuses, spelling out the government's determination to stamp out the reckless behaviour of the past.

Myners has already persuaded UK banks to voluntarily restrict cash payouts and give greater transparency.


Myners meeting: The Treasury Minister has asked foreign banks to toe the line

He hopes to persuade overseas players to do the same. British banks such as Barclays and Royal Bank of Scotland fear they will lose employees if there is not a level playing field.

Senior representatives from Goldman Sachs, JP Morgan, Deutsche Bank, Citigroup, Bank of America Merrill Lynch and Morgan Stanley will all be attending the meeting in Whitehall.

Sources say other participants were still being finalised last night, but there should be around ten banks attending the meeting.

A source said: 'We are looking for some acknowledgement that changes are coming. We would like wider co-operation, but we are not raising our expectations on an agreement.' It is thought that Myners is keen to be able to issue some sort of statement signalling-that the foreign banks will fall into line on pay.

Amid what looks like will be a bumper bonus year for investment banks, the government is desperate to ensure that some restraint is displayed in the City of London at a time when the rest of the economy is shaky. 

It is all too conscious that staff at Goldman Sachs are on track to earn an average of £500,000 in pay and benefits this year. It also hopes to reach a consensus with banks such as Deutsche who are not even regulated in the UK. 

The five biggest UK banks  -  HSBC, Royal Bank of Scotland, Lloyds Banking Group, Barclays and Standard Chartered  -  have all agreed to limit the amount of bonuses paid in cash and to defer rewards over a number of years. They will also give greater details about the number of staff receiving high payouts and will 'claw back' payouts if future performance is below targets.

These banks were cajoled  -  some say blackmailed  -  into submission by the government. They feared onerous legislation in many other areas if they didn't agree.

Such tactics will be harder to employ with the overseas banks, who support tens of thousands of British jobs and could threaten to move offshore. Myners is likely to take a softer approach to encourage them that it makes sense to have a global agreement before any formal legislation comes to bear. 

Treasury to ask global banks operating in Britain to rein in bonuses

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