Brown: Bank’s pay is ‘moral bankruptcy’

By staff

Prime minister Gordon Brown called the latest revelations over bankers’ pay “moral bankruptcy” today and called for a global tax on banks.

Speaking on the BBC1’s The Andrew Marr Show this morning the prime minister said news of fraud allegations at Goldman Sachs’ suggested “moral bankruptcy”, before adding: “This is probably one of the worst cases we have seen.”

The Observer reported today that the bank had earmarked £3 billion pounds, half of its revenue this year, for pay and bonuses to its staff.

The news comes days after the bank, and one of its vice-presidents, Fabrice Tourre, was accused by the US Securities and Exchange Commission of fraud.

The bank denies the allegation.

Mr Brown said: “We need a global financial levy for the banks, we have to quash remuneration packages such as Goldman Sachs. I cannot allow this to continue.

“Everything I find out convinces me we’ve got to go in deeper and I believe I’m the man to go in and deal with these problems with the banks.”

Last week Mr Brown said he made a “mistake” when he acceded to call for lighter regulations on financial institutions during his years as chancellor.

Today he said: “Every time I moved on regulation I had people saying this is ridiculous – deregulation is the only way forward. I accept we didn’t know what was going on inside independent companies.

“The banks have let us down. There is a moral bankruptcy reflected in what I’ve been reading about and hearing out. I want a special investigation.”

Mr Brown added: “The banks are a risk to the economy. We’ve got to make sure they behave in a proper way. We’ve got to do it at an international level. We need agreement about what we need to do. A new global constitution for the banks is a big issue.”