Bank executives 'want governments to step in over pay'

8 February 2010

Bank executives in the US and UK have asked government figures to oversee an industry-wide clampdown on bonuses.

This is according to Reuters, which reported that the chairman of one Wall Street bank has spoken with US president Barack Obama about remuneration issues.

In addition, the chairman of a leading UK bank told the news agency that he had contacted the British government and urged ministers to help the industry control pay levels.

Speaking to Reuters on condition of anonymity, both executives said that banks could not impose wide-ranging constraints on compensation themselves for fear of violating competition regulation, known as antitrust law in the US.

They also claimed that individual banks are reluctant to take action over pay due to the fear that it could impact on their board recruitment, with rivals using differences in compensation levels to poach talented executives.

Their comments follow a report from the Financial Times, which cited an unidentified source as stating that Bank of America employees are due to receive an average bonus of $400,000 (£256,000) for 2009.