Gordon Brown, UK prime minister, yesterday pledged tough action to clamp down on excessive remuneration for bankers as part of an international effort to rectify the systemic weakness which led to the global financial crisis.
In an interview with the Financial Times, Mr Brown said pay and bonuses should be based on long-term success not short-term speculative gains; banks should “claw back” bankers' rewards if performance suffered in subsequent years; and regulators should be able to impose higher capital requirements on financial institutions.
“We have to move faster,” said Mr Brown. However, he declined to endorse comments by Lord Turner, chairman of the UK's Financial Services Authority, that the financial services sector in Britain was “bloated” and needed to be cut down to size. While it was now clear that the banking sector had “overheated”, it was vital to safeguard the status of the City of London as an international financial centre.