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Business Daily: Bankers' Bonuses 

18/01/2010

Bankers' Bonuses 

BBC World Service - Business Daily, Bankers' Bonuses

Could bankers' bonuses be controlled by a 'claw-back' system?

The G20 agreed measures to curb bankers' bonuses including 'clawback' provisions so that if loans go sour, the banker who arranged them must repay the bonus. We look at a possible clawback scheme.

Anger is a feeble word for what many people feel about the latest round of bonuses for bankers. Why should they be flush with cash, say the public, when our economies and the public finances were devastated by a crisis caused by the banks' own mistakes? 

President Obama has called bank bonuses 'obscene'.  

Last year the G20, the world's most powerful economies agreed a series of measures to curb bonuses including spreading payments over years and making clawback provisions, so that if loans go sour the banker who arranged them must repay the bonus.

One proposal for a claw-back system comes from Neil Record, a former Bank of England economist. He is chief executive of Record plc, a firm which deals with currency investments. He suggests bankers should carry with them liabilities for their bonuses for up to ten years, which would be repaid if the bank went bust.   

Plus Lesley Curwen talked about bonuses to two people who've written books about their experience in banking. Clark McGinn is a senior banker with a UK bank; his book is called 'Out of Pocket'. Former trader Barbara Stcherbatcheff wrote 'Confessions of a City Girl'. 

And Lucy Kellaway of the Financial Times muses on the effect on British businesses of unusually snowy weather.

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