People in banking jobs 'should concentrate on improving balance sheets'

Financial rewards to people in banking jobs for bringing in short-term profits should not be placed ahead of the interests of shareholders, Lord Myners has said.

In a letter to the 50 top fund managers in the UK, the City minister stated that those in senior banking jobs should be focusing on improving the balance sheets of their firms rather than increasing staff pay and bonuses.

"Asymmetrical remuneration policies, tilted in favour of risk, might be good for traders," he stated.

"But they are not good for customers, employees, creditors and owners of banks - or the taxpayer."

He added that the way profit sharing was worked out had been unfairly balanced in favour of those in banking jobs for too long.

Last month, Andrew Haldane, executive director for financial stability at the Bank of England, gave a speech on a similar topic in which he urged banks to tackle their long-term debts ahead of rewarding staff with additional bonuses.

Updated: 04 February 2010.
Categories: banking-and-financial-services, market-and-industry-news.