Skip to main content

Banks: Regulation

Volume 485: debated on Wednesday 17 December 2008

To ask the Chancellor of the Exchequer what guidelines (a) UK Financial Investments Ltd and (b) the Financial Services Authority has established to govern bonuses paid to senior bank executives. (243869)

On 13 October 2008 the chief executive of the Financial Services Authority wrote to the chief executives of the major banks and building societies, setting out the criteria for remuneration policies and practices which are properly aligned to sound risk management and controls.

UK Financial Investments Limited (UKFI), which is wholly owned by the Government, will oversee the conditions attached to subscribing to the Government's recapitalisation fund, including in relation to remuneration policies of banks’ board directors. UKFI will work to ensure management incentivisation based on long-term value maximization, which attracts and retains high quality management and which minimises the potential for rewarding failure.