Consultation launched to improve large bank pay transparency

A consultation forming part of the government's commitment to improve transparency in the banking sector was launched today (December 7th), in a bid to tackle "unacceptable" bonus payments.

One of the key aims financial trading professionals might already be aware of was explained by financial secretary to the Treasury, Mark Hoban, who explained that the system must no longer be allowed to place investors at risk by rewarding employees of large banks for short-term performance.

The consultation is part of the government's commitment reduce risk-taking within the industry, where better corporate governance is also needed.

Transparency arrangements would mean that in large banks, the eight non-board executives who receive the highest pay would have to disclose such financial details.

Mr Hoban said it was important for shareholders to have more tools at their disposal in order to "hold senior management to account".

"[This is] why we're taking action to make top-level pay more transparent. We want the most transparency for those with the greatest responsibility," he added.

It is suggested that the proposals would lead about 15 banks have better transparency.

The consultation was launched as prime minister David Cameron prepares to safeguard the UK's financial services industry.

He said it was "under continued regulatory attack from Brussels" and one of his aims at the upcoming EU summit would be to claw back power.

But Reuters noted he is likely to soften his stance, despite the potential to "drive a hard bargain" and demand more control of the country's interests in return for support of an answer to the Eurozone crisis.

Despite Britain being one of the ten nations that does not use the common currency, many reports suggested he could use the breeding EU debt crisis to gain extra safeguards.