Darling vows vigilance on bankers' bonuses
Friday, 3 July 2009 12:00 AM
By politics.co.uk staff
Chancellor Alistair Darling fired a warning shot across bankers' bows today as he warned them not to relapse into pre-recession bonus habits.
The chancellor told the Independent newspaper that he believed many in the City were "too complacent" and "need to be brought back to Earth".
Next week's white paper on banking is not expected to include any specific provisions about pay.
But Mr Darling remained clear bankers should not forget they owe the government - literally, in some cases.
"Some are only operating at all because of very substantial support from taxpayers, who are entitled to tell the government we must not repeat the mistakes," he said.
"If they go back to the way they were - to business as usual - without asking themselves over and over again whether they understand what they are doing, that would be disastrous for them and the rest of the world."
Mr Darling denied tensions between himself and Bank of England governor Mervyn King, who has been fighting to keep the Bank's roles as the chancellor prepares to shake up the tripartite system of banking regulation.
They failed to spot flaws which led to the recent crisis but Mr Darling was keen to press that the Bank and the Financial Services Authority (FSA) should not work against each other.
"It is not a turf war. It is a question of ensuring they both do the job they are set up to do and both do it effectively. They are not competing with each other. They are complementary," the chancellor added.
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