Banks to Have More Obligations Under New Authority
27 May 2011
The Financial Times reports that Financial Services Authority (FSA) head Hector Sants has warned that UK banks will have to convince regulators that future bonuses and dividend payments will not “dent capital reserves or undermine sound risk management” before handing these out, under a new planned Prudential Regulatory Authority (PRA). Mr Sants reportedly stated that the new plan has been put in place to “incentivise management to act responsibly” in light of a “reduction in investor confidence” in recent years. The FSA is reportedly being split into the PRA and a Financial Conduct Authority, which will focus on markets and consumer protection.
Financial Times: UK banks face bonus shake-up (18 May 2011 – subscriber access only)