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December 9, 2022

British govt in talks with banks over bonus limits

UK government ministers want the senior bankers to cut bonuses or face the threat of more regulations to claw back billions of pounds of taxpayers’ money used to rescue the finance industry, The Independent informs. Business Secretary Vince Cable, a Liberal Democrat, told two undercover reporters from the Daily Telegraph that the junior coalition partner favoured a “very tough approach” that was opposed by “our Conservative friends”. Cable and Conservative finance minister George Osborne will try to present a united front when they meet chief executives from Royal Bank of Scotland, HSBC, Barclays and Lloyds. A scheduled meeting between the Government and bank chiefs on the subject was cancelled on Monday, till Tuesday, after the Chancellor, George Osborne, was stranded in New York by the bad weather.. The delay gives the Government an opportunity to stiffen its resolve to curb bonuses. Government sources were keen to play down the meeting, saying it was part of ongoing dialogue rather than the “showdown” on bonuses portrayed by media reports. However, pressure on UK banks to rein in pay before bonuses are paid in the New Year is mounting, with the Lib Dems ratcheting up the rhetoric.

Recent polls show Lib Dem support at its lowest level in years after the party reversed its election pledge to oppose higher university tuition fees, leading to violent protests. Being tough on banks could help the party regain some support.

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