Bankers’ pay deal slows business lending agreement
London, England, United Kingdom (AHN) – The British coalition government had been bogged down in its talks with large banks under Project Merlin because of details on bankers’ pay. Agreement on more restraint and transparency on bonuses for bankers is slowing the possibility of reaching a deal for banks to lend $285 billion (GBP 190 billion) to small businesses.
Chancellor George Osborne is supposed to bare more details of the agreement at the House of Commons, but observers said reaching a deal appears unlikely before Tuesday.
MPs are seeking a deal prior to the start of the bank reporting season, which begins Feb. 15, to be led by Barclays.
The government wants the banks to provide more information on highest earners among bank executives, similar to pay disclosure rules in Hong Kong.
Despite the lack of agreement, speculations are rife that Hong Kong and Shanghai Banking Corp. Chief Executive Stuart Gulliver is set to receive up to a $15 million (GBP 10 million) bonus, while Barclays Chief Executive Bob Diamond will get $13.5 million (GBP 9 million).
The reports of multimillion bonuses amid belt tightening measures by the government and ordinary Britons led opposition MPs to declare a failure of government talks with banks under Project Merlin.
The banks originally offered to loan small businesses $222 billion (GBP 148 billion), but the opposition was pushing for a $300 billion (GBP 200 billion) loan allocation.
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