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UK chancellor urges banks to curtail bonuses in light of G-20 agreement

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] UK Chancellor of the Exchequer Alistair Darling on Monday urged banks to cut back on bonuses immediately instead of waiting for legislation following an agreement reached at last week's G-20 summit. In a speech to the Labour Party conference, Darling said that he hoped banks around the world would all cut back on bonuses but acknowledged that British legislation would not be in place until after this season's round of bonuses. Darling also introduced a new Fiscal Responsibility Act that will require the government to reduce the country's deficit, which currently stands at £800 billion. Specific plans for reducing the deficit will be laid out over the next several weeks in the Pre-Budget Report. The US has also been taking steps to increase financial industry oversight. Earlier this month, US President Barack Obama stressed the need for stronger financial industry regulations in a speech marking the one-year anniversary of the collapse of Lehman Brothers Holdings. In July, the Obama administration sent Congress draft legislation that would put the Federal Reserve in charge of regulating the largest financial firms. The proposed legislation would create an eight-member Financial Services Oversight Council to pinpoint risks in financial markets and would establish a National Bank Supervisor and Resolution Authority. It would also create within the Department of the Treasury an Office of National Insurance, the director of which would be charged with identifying gaps in industry regulation that could lead to crises in the insurance or financial systems.

Full post as published by JURIST - The Paper Chase on September 28, 2009 (boomark / email).