LLOYDS BANK PROFITS 07:46: OK.... so those legacy issues in full. Lloyds says these include set aside payments for Payment Protection Insurance (PPI) of £600m and £226m for Lloyds' involvement in the 2012 Libor interest rate rigging scandal and fiddling the repo rate. Lloyds also paid out £1.1bn to investors as part of a scheme that is seeing it buy back fixed income bonds - known as Enhanced Capital Notes - issued in 2009. That was then partly offset by a pensions credit of £710m, the bank says.
Bank bonuses: some stick: Bonuses for senior staff and “material risk takers” will have to be deferred for longer, and banks will be able to claw back bonuses for up to 10 years after payment.
Cue fears about how the rules will make it harder for U.K. banks to attract staff. But if banks want to pay staff in a certain way, they will manage to do it via higher fixed pay or new bonus structures. More rules are an invitation for pay consultants and lawyers to get creative. And not everything is included.
The question of sales incentives for retail staff has been pushed into the long grass – and yet it was these incentives that caused so much mis-selling of U.K. payment protection insurance. There also needs to be a bigger stick.
Giving regulators more powers to name, prosecute, fine and even imprison those who misbehave would be more effective than a convoluted set of rules governing bonus deferral periods and clawbacks.
U.K. regulators would use such rules – on Wednesday the Financial Conduct Authority said that former hedge fund Manager Alberto Micalizzi would be fined £2.7 million for concealing losses. Plenty of stick there.
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