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Banks must be 'responsible' says UK PM

Monday 10 January 2011 - by Will Henley

UK Prime Minister David Cameron has urged the country's banks to behave "responsibly" by exercising restraint over bonuses, but has stopped short of promising a government crackdown on the billions expected to be paid out this year.

Interviewed by the BBC on Sunday, the Conservative leader suggested that banking institutions and executives were unfairly being held responsible for the financial crisis, saying they were an "easy scapegoat".

The Prime Minister said that UK-based banks should be "socially responsible" by improving lending to businesses and ensuring that bonuses were lower than last year as he highlighted the Financial Services Authority's "very tough" new rules on payouts, brought in late last year to comply with new European-wide guidelines.

Cameron said: "Do we still need the banks to do more to demonstrate their social responsibility? Yes we do. But we, as a government and a country, have got to get a settlement where we recognise that a successful banking sector is part of a successful market economy.

"What I want to see is socially responsible banks behaving responsibly, lower bonus pools than last year's, responsible levels of remuneration and proper agreements on levels of lending to businesses large and small and being good citizens in the community."


Cameron's comments came as public concerns mount that the country's biggest banks would award overly generous bonuses.

One Sunday newspaper report claimed that the chief executive of Royal Bank of Scotland, one of the country's part-nationalised banks, could receive a £2.5m (€3.0m/$1.5m) bonus for 2010, bringing his total pay packet to around £6.8m (€8.2m/$10.5m).

The Prime Minister said that RBS should not be "leading the way" on bonuses and said he wanted to see a smaller bonus pool than the previous year.

But, warning against "banker bashing", he insisted that regulators and politicians should also be held accountable for the financial crisis, not just the financial services sector.

"There were a lot of people to blame for the mess we are in and that we shouldn't just think it's an easy scapegoat to pick one in view," he said.

"Governments made mistakes, regulators made mistakes, politicians made mistakes - everyone was involved.

Observers have cited the apparent waning influence of coalition partner the Liberal Democrats as a factor for a softening in Cameron's stance towards the financial services sector.

Liberal Democrat Business Secretary Vince Cable, who has been vociferous in his condemnation of the banks, narrowly avoided the sack last month after being secretly recorded making embarrassing comments in his constituency office.


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