HSBC To Pay £1.2bn In Money Laundering Case

Record Fine: HSBC's Statement

Updated: 8:39am UK, Tuesday 11 December 2012

HSBC released the following statement after confirming it will pay $1.9bn (£1.2bn) to the US Department of Justice over money-laundering.

HSBC has reached agreement with United States authorities in relation to investigations regarding inadequate compliance with anti-money laundering and sanctions laws.

This includes a Deferred Prosecution Agreement (DPA) with the US Department of Justice. HSBC has also reached agreement to achieve a global resolution with all other US government agencies that have investigated HSBC's past conduct related to these issues and anticipates finalising an undertaking with the United Kingdom Financial Services Authority shortly.

Under these agreements, HSBC will make payments totaling $1.921bn, continue to cooperate fully with regulatory and law enforcement authorities, and take further action to strengthen its compliance policies and procedures.

Stuart Gulliver, Group Chief Executive, said: "We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes. Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters.

"While we welcome the clarity that these agreements bring, ensuring the highest standards wherever we do business is an ongoing process. We are committed to protecting the integrity of the global financial system. To this end we will continue to work closely with governments and regulators around the world."

In the past several years, the Board of HSBC Holdings plc has taken decisive action to direct management to fix past shortcomings as they have come to light. Since 2011, with new senior leadership teams in place at both HSBC Group and HSBC North America, HSBC has taken extensive and concerted steps to put in place the highest standards for the future.

The Department of Justice has recognised these efforts in the DPA: "Management has made significant strides in improving 'tone from the top' and ensuring that a culture of compliance permeates the institution. The efforts of management have dramatically improved HSBC Bank USA's and HSBC Group's Bank Secrecy Act / Anti-Money Laundering and Office of Foreign Assets Control compliance programmes."

As noted in the DPA, HSBC Bank USA already has, over the past several years, undertaken the following voluntary remedial measures:

• increased its spending on anti-money laundering (AML) approximately nine-fold between 2009 and 2011;
• increased its AML staffing nearly ten-fold between 2010 and 2012;
• revamped its Know Your Customer programme, including treating non-US HSBC Group Affiliates as third parties subject to the same due diligence as all other customers;
• exited 109 correspondent relationships for risk reasons;
• clawed back bonuses for a number of senior officers, and
• spent over $290m on remedial measures.

HSBC Group has also undertaken a comprehensive overhaul of its structure, controls, and procedures. A number of these improvements is included in the DPA. Among other measures, HSBC Group has:

• simplified its control structure, allowing the Group to manage risks worldwide more effectively;
• elevated the role of Group Compliance and given it direct oversight over every compliance officer globally, so that both accountability and escalation now flow directly to and from HSBC Group Compliance;
• created the new role of Head of Group Financial Crime Compliance and Group Money Laundering Reporting Officer, who will help to establish a Global Financial Intelligence Unit;
• made other new senior hires with extensive experience handling relevant international legal and regulatory issues, including a new Chief Legal Officer and a new Global General Counsel for Litigation and Regulatory Affairs;
• adopted a set of guidelines limiting business in those countries that pose a high financial crime risk;
• issued a new global sanctions policy using a more extensive and consistent set of lists to screen all cross-border payments;
• commenced a review of all Know Your Customer files across the entire Group - the first phase of this remediation will cost an estimated $700m over five years, and
• undertaken to implement single global standards shaped by the highest or most effective anti-money laundering standards available in any location where the HSBC Group operates.

Over the five-year term of the agreement with the Department of Justice, an independent monitor will evaluate HSBC's progress in fully implementing these and other measures it recommends, and will produce regular assessments of the effectiveness of HSBC's compliance function.

The agreement notes that HSBC Bank USA and HSBC Group have "provided valuable assistance to law enforcement." HSBC conducted multiple extensive internal investigations, voluntarily made employees available for interviews, and collected, analysed and organised voluminous evidence and information.

HSBC is firmly committed to putting in place robust standards that will help promote the integrity of the global financial system. 

16.01 | 0 komentar | Read More

Starbucks Effect? Costa Coffee Sales Shoot Up

Sales at Costa Coffee have shot up by over 25%, the chain's owner Whitbread has reported.

Like-for-like sales at its coffee shops increased by 7.1%, while total sales were up by 25.5% in the three months to November 29.

It comes amid an ongoing row about the way that some companies - including its rival Starbucks - pay tax in the UK.

In October, it was revealed that Starbucks had paid just £8.6m in corporation tax despite taking billions of pounds in revenue from more than 750 outlets since 1998.

Whitbread's chief executive Andy Harrison said he acknowledged that "Starbucks has issues", and added: "UK consumers are voting with their taste buds."

Last week, Starbucks UK's managing director Kris Engskov told Sky News it had decided to "take action", and would pay around £20m in corporation tax over the next two years.

Whitbread, which is the UK's largest hotel and restaurant group, also reported a hike in total sales across the group, which were up 14.4%.

The company, which also owns Premier Inn and the Beefeater and Brewers Fayre pub chains, said its brands continued to outperform the market.

"Whitbread continued its strong growth momentum with total sales up 14.4% together with good like for like sales growth of 3.3%. This once again demonstrates the strength of our brands," Mr Harrison said.

"The economic environment remains challenging with no change in our background consumer market. We are on track to deliver full year results in line with expectations."

More follows...

16.01 | 0 komentar | Read More

HSBC Bonuses Hit After £1.2bn Fine

By Mark Kleinman, City Editor

HSBC's top executives are to defer a portion of any bonuses they are awarded for the next five years following the bank's £1.2bn fine for breaching money laundering rules in the US.

I have learned that the Deferred Prosecution Agreement (DPA) between HSBC and the US Department of Justice (DoJ), which will be published later today, will disclose details of fresh pay restrictions the bank is imposing on key staff.

The bonus deferrals, which will affect dozens of managers including Stuart Gulliver, HSBC chief executive, will be in addition to the clawing back of millions of pounds in past bonuses awarded to executives involved in HSBC's US operations.

The terms of the new remuneration arrangements will involve Mr Gulliver and his colleagues deferring the element of their bonuses relating to adherence to compliance rules for the full five-year term of the DPA.

However, Sky News understands that the bank's remuneration committee has not yet decided whether Mr Gulliver and others should waive in full any bonuses they are awarded for 2012 following the US settlement.

Mr Gulliver took charge of HSBC at the beginning of last year, long after the breaches of US laws including the Trading With The Enemy Act, took place.

Last year, compliance-related functions accounted for approximately 15 per cent of the overall bonus pots handed out to HSBC executives.

A number of senior staff, including HSBC's chief compliance officer, the former chief executive of its US business and the bank's anti-money laundering director, have had parts of bonuses clawed back already. Sandy Flockhart, a former board member who oversaw HSBC's Mexican operations, is also expected to have a substantial sum of money reclaimed by the bank.

It is questionable whether HSBC's shareholders will view these gestures as sufficient given that Barclays' top executives agreed to waive their bonuses in full following its settlement over Libor manipulation. Even that was not enough to save the jobs of Bob Diamond and Jerry del Missier, Barclays' chief executive and chief operating officer.

The agreement with US authorities, which was confirmed on Tuesday morning, represents a humiliating chapter in the history of HSBC, a bank that prided itself on remaining free from direct taxpayer support during the financial crisis of 2008.

The £1.2bn penalty represents about one-seventh of HSBC's annual profit in 2011.

A Senate hearing earlier this year disclosed a litany of failings within HSBC's Mexican operations, which effectively allowed the bank to be used as a haven for terrorist financiers and drug cartels.

Mr Gulliver said today:

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes. Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters.

"While we welcome the clarity that these agreements bring, ensuring the highest standards wherever we do business is an ongoing process. We are committed to protecting the integrity of the global financial system. To this end we will continue to work closely with governments and regulators around the world."

HSBC also said that it would finalise an undertaking with the Financial Services Authority (FSA), the bank's lead regulator, shortly.

I understand that this will include the appointment of an independent monitor to oversee HSBC's compliance function as the bank attempts to restore trust among its supervisors.

HSBC said that it had also spent nearly £200m on remedial measures to overhaul its compliance function.

The FSA, which declined to comment, is likely to announce its new supervisory measures alongside the statements from US regulators later today.

16.01 | 0 komentar | Read More

Tax Row 'Helping John Lewis Online Sales'

Tax Row: Convenience Still Priority

Updated: 7:27pm UK, Sunday 09 December 2012

By Tadhg Enright, Business reporter

Recession? What recession?

So has been the mantra at John Lewis throughout the financial crisis during which sales growth consistently outperformed its high street rivals.

The recession is over but consumers are still expected to buy less, not more, this Christmas.

So could it be a bit of a stretch to suggest that stellar growth in John Lewis sales this past week has anything to do with Amazon's recent exposure as an avoider of UK corporation tax?

Speaking to Sky News, the retailer's boss Andy Street acknowledged "I can't prove it" and that it could all just be a coincidence.

While sales rose 15% over the past week compared to the same time last year, he pointed in particular to even higher (but undisclosed) growth in online sales.

But with internet shopping becoming more normal with each passing year, most online retailers are enjoying double digit growth.

And John Lewis has not been left wanting with its approach to so called "clicks and mortar" retailing.  It has been a trend leader rather than a follower so will naturally enjoy better growth than others.

Also bear in mind that John Lewis and Amazon are very different retailers and the overlap between their customer bases is thin.

Ask any business journalist and they'll tell you that John Lewis will take any chance to get a bit of free, positive publicity. Amazon has been more of a shrinking violet during the controversy over its taxes.

Business reporters who have been canvassing shoppers outside branches of Starbucks will also know that a majority of the people they speak to are oblivious to the scandal over its tax affairs.

Of those who know all about it, only a fraction are likely to avoid the tax-avoiders.

But Starbucks' u-turn shows just how serious some are taking the tax debate.

It has decided to pay £20m in corporation tax over the next two years, which, it maintains, it does not have to pay.

That wasn't enough though to prevent protesters occupying some of its cafes this weekend.

But it will be enough to convince the more nonchalant among us that it's ok to get your latte at Starbucks again.

In fact, consumer experts will also tell you that when a company puts right what once was wrong it can often enjoy a boost rather than a simple bounce-back in sales.

With 15 days to Christmas, the rush is on and many consumers simply don't have the time, energy or patience to change their habits.

Amid the chaos, shoppers are more likely than ever to put convenience before conscience.

16.01 | 0 komentar | Read More

Twitter Fined Over UK Business Accounts Delay

By Pete Norman, Sky News Online

Social media giant Twitter has been fined after failing to file its UK corporate accounts, Sky News has learned.

The company was due to lodge its annual accounts no later than September but has still not done so, according to Companies House.

As a result Twitter UK Ltd and its secondary company, TweetDeck Ltd, have been hit with automatic penalty charges by the Cardiff-based authority.

The penalties are set to climb if the companies continue to delay filing the accounts.

The returns are used as a basis for tax filings with HM Revenue and Customs (HMRC). There is no suggestion the companies have avoided any tax liability.

A spokesman for Companies House told Sky News: "They are both currently in default on the submission of accounts to us on their respective due dates.

The website for Companies House, based in Cardiff

"Companies House records show Twitter's accounts should have been delivered by September 30 but there is no indication this has been done.

"There is no indication at this stage when the accounts will be available but as a matter of routine we will already be in correspondence with the companies to request that they file as soon as possible."

Twitter UK and TweetDeck are wholly-owned subsidiaries of California-based Twitter Inc.

Twitter has yet to reply to Sky News with an explanation for why it has failed to lodge the accounts.

TweetDeck was started by Sheffield-educated computer programmer Iain Dodsworth in 2008 and sold to Twitter last year for an estimated £25m.

Twitter UK has three American directors, Ali Rowghani, Richard Costolo and Alexander Macgillivray, who list their address as a San Francisco office.

Mr Macgillivray is company secretary for both Twitter UK and TweetDeck. He is also general counsel for the parent firm and head of its public policy and trust department.

According to the Institute of Directors, one of the formal duties of a company secretary is to take responsibility for filing annual returns to the registrar in Cardiff.

Iain Macgillivray (r), the US-based company secretary of Twitter UK Ltd

The spokesman for Companies House added: "At this time they will have already attracted a late filing penalty in accordance with the tariff published on our website.

"Failure to provide accounts for the public record can, ultimately result in company strike off, however, we are some way from that at this stage.

"Our objective remains, as always, to get the companies concerned to file their account so that these can be made available for public access, which we hope will be a positive conclusion to our continuing correspondence."

Mr Macgillivray, who also holds Canadian citizenship, became TweetDeck's company secretary after services of the British incumbent - Complete Secretarial Solutions Ltd - were terminated in May, 2011.

TweetDeck's founder, Mr Dodsworth, had his role as a director terminated in July, 2011.

The social media giant's British operation was originally named Twitter Information Network Ltd. It was incorporated on June 1, last year but given a name change to Twitter UK four months later.

The management team of Twitter has recently prepared for an expansion of staff in its London and Dublin offices as it builds a multinational sales team for Europe.

Plans include increasing advertising revenue and a system to automatically translate tweet feeds into more than 28 languages.

It is also appointing a "media partnerships manager" to cultivate wider use of Twitter by celebrities including "athletes, actors, comedians, musicians etc".

Google, Amazon and Starbucks have all come under fire

The revelation about Twitter's filing status with Companies House comes amid increasing public furore over the tax arrangements of other US multinationals with HMRC.

MPs investigating corporate tax structures of multinational firms recently slammed Starbucks, Amazon and Google.

Last week Starbucks said it would give some £20m over two years to HMRC, even though it was not required to by law.

The move was slammed as a "gift" by critics and HMRC said: "Corporation tax is not a voluntary tax and Parliament sets out the rules and rates for businesses to follow.

"The public expects businesses to pay their fair share and HMRC will challenge, through the courts if necessary, any structures or tax payments that do not comply with the UK tax law."

Starbucks' decision followed a public outcry over its accounting procedures, whereby it paid just £8.6m in UK corporation tax despite receiving billions in revenue from more than 750 stores.

In an interview with Sky's Jeff Randall, Starbucks CEO Kris Engskov said the US coffee giant had not been profitable in the UK since it brought its brand to Britain 14 years ago.

But he admitted their 2011 US report and accounts may be wrong when they referred to the fact that the UK was making a "significant portion of the net revenue and earnings of our international operations".

It was revealed Google paid £6m in UK tax in 2011 on sales of £395m, while Amazon paid no corporation tax in the same period, despite sales of £3.3bn.

16.01 | 0 komentar | Read More

Unemployed To Get Free Bus Travel

Bus companies have come together to offer free travel to the unemployed as part of a Government-backed scheme to help people find work.

Some 800,000 people across Britain who have been without a job for between three months to a year will be eligible to claim for a card, giving them free bus rides in January.

The JobCentre Plus Travel Discount Card already entitles them to half-price journeys.

Arriva, First, Go-Ahead, National Express and Stagecoach are among the operators signed up to the deal, which covers 70% of routes in England, Wales and Scotland.

Transport minister Norman Baker said: "Good bus services play a huge role in boosting economic growth by helping people to access employment and training opportunities.

"I have been encouraging bus operators to look at the fare deals they can offer to young people looking for work, so I congratulate the operators that are doing so in January and look forward to seeing other offers in the future."

The initiative was co-ordinated by Greener Journeys, a campaign group involving leading bus companies and supporters including Transport for London and the RAC Foundation.

Chief Executive Claire Haigh said: "In difficult economic times, this new scheme will provide a helpful start to the New Year, enabling job hunters to travel around more easily in search of employment, to job interviews with prospective employers, and to training courses which will help them find work."

The latest official unemployment figures are released on Wednesday this week.

16.01 | 0 komentar | Read More

FSA Warns Banks On Bonus Culture

The City regulator has warned Britain's biggest banks that they need to demonstrate "a change in culture" when they unveil their bonus pots for 2012 in the new year, paving the way for one of the steepest reductions in payouts on record.

I have learnt that Andrew Bailey, head of the Financial Services Authority's (FSA) supervisory arm, has told the chairs of the major UK banks' remuneration committees that they should take into account the industry's reputation when they decide on bonuses.

He made the demand at a recent meeting with the chairs of the UK banks' remuneration committees at which they were told that overall levels of pay should show a sharp decrease for 2012.

They were also informed that the bonus cuts should go beyond the required evidence of banks clawing back pay awarded to executives and staff involved in mis-selling.

Among the attendees at the meeting, which took place several weeks ago, were Penny Hughes, chair of the remuneration committee at Royal Bank of Scotland; John Thornton, her equivalent at HSBC; Sir John Sunderland at Barclays; and Tony Watson from Lloyds Banking Group.

Major lenders have already begun consulting with shareholders on the shape of their pay pots for 2012, with Barclays' new management in particular signalling that the proportion of revenues paid to its investment bankers will fall sharply.

The warning from Mr Bailey about clawbacks will ultimately result in hundreds of millions of pounds in previously-awarded bonus payments being reclaimed from relevant staff, according to people close to the regulator.

The two taxpayer-backed lenders, Lloyds Banking Group and RBS, have imposed a ceiling on cash payouts of £2,000 for each of the last three bonus rounds, a restriction that is almost certain to be repeated in 2013.

In October, Mr Bailey wrote to the chief executives of major banks with operations in London to inform them that bonuses for 2012 must reflect the mis-selling and market manipulation scandals that have rocked the sector this year.

The FSA's intervention will be welcomed by the major investors in banks, who have argued since the financial crisis that the decline in pay levels has failed to keep pace with the diminishing returns distributed to shareholders.

HSBC is the only one of the major lenders with which City institutions have declared themselves satisfied with the relative distributions between investors and employees. Banks are also under pressure from regulator to retain more capital to strengthen their balance sheets.

The meeting has become a traditional fixture on the FSA's calendar ahead of the annual banking industry pay round.

The FSA declined to comment on specific meetings with banks but said it held discussions with them on a range of issues.

16.01 | 0 komentar | Read More

Bank Staff 'Under Pressure To Sell', Which? Says

Staff at Britain's largest banks remain under pressure to sell products to customers, often regardless of whether they are appropriate, an investigation claims.

Two thirds of bank staff with a sales role said there is now "more pressure than ever" to meet their targets, according to a Which? survey of front line bank employees.

Almost half of the 500 people interviewed said they knew colleagues who had mis-sold products to meet their targets, and 40% reported that they are encouraged to sell even when it is not appropriate.

Which? interviewed branch and call-centre staff from HSBC, Royal Bank of Scotland, Lloyds Banking Group, Barclays and Santander, and found that even when incentives are removed, the practice prevails.

Although over 40% said incentives for sales have decreased, more than 80% said the pressure to meet sales targets has stayed the same or increased.

The research comes despite a string of mis-selling scandals over recent years, knocking customers' trust in UK banks.

The PPI mis-selling scandal has cost the big banks £10bn to date

The most high-profile - the mis-selling of payment protection insurance - has already cost the big banks more than £10bn in compensation claims, with that bill expected to rise.

Of the staff surveyed, over a third said they are not comfortable with the pressure they are under to sell products, and two thirds added that they are sometimes or always ordered to sell more.

Which? chief executive Peter Vicary-Smith called for "big change" across the banking industry, with customers - not sales - put first.

"Our survey reveals the stark realities of the sales culture that still exists at the heart of the banking industry," he said.

"Senior bankers say the culture is changing but this shows it just isn't filtering through to staff on the front line who remain under real pressure to put sales before service, even after incentives are taken away.

"We're calling on the banks to be much more transparent about their sales targets and incentives.

"We also want to see bankers meet professional standards and comply with a fully independent code of conduct."

A spokesman for the British Bankers' Association (BBA) said that any incentives for front line staff are now based on clear criteria related to customer service.

"Selling people products they do not need is not putting the customer's interests first and therefore is ultimately bad for the bank," he said.

"The banks will be looking at the findings of this small survey - along with their own internal research - to understand why any staff might feel otherwise."

Which? said it will provide a collection of evidence on the banking industry to the Parliamentary Commission on Banking Standards, the Government and opposition MPs, and the Financial Standards Authority (FSA).

Barclays and the Co-operative bank have already announced plans to refocus their incentives schemes on customer service.

A spokeswoman for Barclays said: "From this week all Barclays UK front line staff are rewarded solely on customer service.

"This follows our announcement in October which was welcomed by Which?"

An HSBC statement said the bank encourages its employees to act "with integrity in the best interest of our customers".

"No one in the UK retail bank, not just customer facing staff, can earn a bonus without meeting the bank's values and behaviours criteria," it said.

And a spokeswoman for RBS said that its staff are rewarded on the basis of customer service and the performance of their branch overall.

"This is part of our move to make sure that customer service is the top priority for all of our staff," she added.

16.01 | 0 komentar | Read More

Starbucks Tax Row: Protestors Occupy Stores

Anti tax avoidance activists have staged protests at more than 50 Starbucks stores to complain about the coffee chain's tax arrangements.

UK Uncut said it was the most widespread day of action it had ever held, showing the depth of anger at the scale of tax avoidance by some large companies.

Pictures uploaded to its Facebook page showed campaigners holding banners and posters while others staged sit-in protests.

The demonstrations went ahead in cities including London, Glasgow, Belfast, Liverpool, Sheffield and Portsmouth even though the US giant announced changes to its tax payments.

Starbucks said it expects to pay around £10m in UK corporation tax for each of the next two years, following the revelation that it paid just £8.6m in 14 years of trading in Britain and nothing in the last three years.

Starbucks' Kris Engskov wrote an open letter to customers on Thursday

UK Uncut said it had "transformed" Starbucks stores into refuges, creches and homeless shelters to highlight the tax issues as well as the effect of Government cuts on women.

There was a police presence at many of the protests, with some of the demonstrators told to report to a police station within seven days. There were two arrests in London.

A UK Uncut spokesman said: "It has been an overwhelming success, sending a clear message to the Government as well as to huge corporations."

One store in Vigo Street, central London, was occupied by protesters at noon and then temporarily closed.

Dozens of activists chanted and waved placards and banners outside, shutting off the street to traffic under the gaze of the police.

The store was transformed into a domestic violence refuge as the protest sought to highlight the "disproportionate" effect that the coalition's cuts to the public sector are having on women.

Lisa Stewart, a 30-year-old UK Uncut activist, said: "Women are bearing the brunt of these cuts, and if they (the Government) made tax-dodgers like Starbucks pay that would bring in £25bn a year.

"Think of all the spending cuts that we could cover with that."

Ms Stewart said the reaction from customers inside the store had been positive, adding: "There is lots of anger out there and people realise they are being lied to."

In an open letter to customers on Thursday, Kris Engskov, managing director of Starbucks UK, said the company had begun "a process of enhancing trust with customers and the communities that we have been honoured to serve for the past 14 years".

He said the company injects nearly £300m annually into the UK economy, and will train more than 1,000 apprentices over the next two years.

16.01 | 0 komentar | Read More

FSA Warns Banks On Bonus Culture

The City regulator has warned Britain's biggest banks that they need to demonstrate "a change in culture" when they unveil their bonus pots for 2012 in the new year, paving the way for one of the steepest reductions in payouts on record.

I have learnt that Andrew Bailey, head of the Financial Services Authority's (FSA) supervisory arm, has told the chairs of the major UK banks' remuneration committees that they should take into account the industry's reputation when they decide on bonuses.

He made the demand at a recent meeting with the chairs of the UK banks' remuneration committees at which they were told that overall levels of pay should show a sharp decrease for 2012.

They were also informed that the bonus cuts should go beyond the required evidence of banks clawing back pay awarded to executives and staff involved in mis-selling.

Among the attendees at the meeting, which took place several weeks ago, were Penny Hughes, chair of the remuneration committee at Royal Bank of Scotland; John Thornton, her equivalent at HSBC; Sir John Sunderland at Barclays; and Tony Watson from Lloyds Banking Group.

Major lenders have already begun consulting with shareholders on the shape of their pay pots for 2012, with Barclays' new management in particular signalling that the proportion of revenues paid to its investment bankers will fall sharply.

The warning from Mr Bailey about clawbacks will ultimately result in hundreds of millions of pounds in previously-awarded bonus payments being reclaimed from relevant staff, according to people close to the regulator.

The two taxpayer-backed lenders, Lloyds Banking Group and RBS, have imposed a ceiling on cash payouts of £2,000 for each of the last three bonus rounds, a restriction that is almost certain to be repeated in 2013.

In October, Mr Bailey wrote to the chief executives of major banks with operations in London to inform them that bonuses for 2012 must reflect the mis-selling and market manipulation scandals that have rocked the sector this year.

The FSA's intervention will be welcomed by the major investors in banks, who have argued since the financial crisis that the decline in pay levels has failed to keep pace with the diminishing returns distributed to shareholders.

HSBC is the only one of the major lenders with which City institutions have declared themselves satisfied with the relative distributions between investors and employees. Banks are also under pressure from regulator to retain more capital to strengthen their balance sheets.

The meeting has become a traditional fixture on the FSA's calendar ahead of the annual banking industry pay round.

The FSA declined to comment on specific meetings with banks but said it held discussions with them on a range of issues.

16.01 | 0 komentar | Read More