In an interview with the Sunday Telegraph newspaper, a top British banker said “mistakes were made” within the industry as bank employees racked up huge bonuses.
Bob Diamond, the president of British banking group Barclays, said banks had done a “pretty poor job” of handling the bonus process, adding that his company would be deferring up to 60 percent of payouts — more than double the usual level.
It comes after Britain said on Wednesday it was slapping a one-off 50-percent tax rate on bonuses above £25,000 (US$40,700) amid fury at 70 percent government-owned Royal Bank of Scotland awarding some £1.5 billion in bonuses for senior staff.
“We [the whole banking sector] have done a pretty poor job of managing how the [bonus] process works. We do agree that many functions should have a higher portion of fixed and a lower portion of variable,” Diamond said. “Clearly there were mistakes made and I’ve made mistakes. This isn’t about anyone saying I don’t have to be part of the solution. It is quite the opposite, it is about saying I do want to be part of the solution.”
Diamond also suggested that the government should not have to step in to prop up banks that get themselves in trouble.
“In principle we should not have institutions that are too big to fail or too complex to fail,” he told the weekly broadsheet. “We need a regulatory framework that allows us to address failing institutions. Big and systemic are not synonymous and big and failure should not be in the same sentence.”
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