Britain is to investigate the link between bank bonuses and excessive risk-taking, Finance Minister Alistair Darling has told a newspaper to be published Sunday.
Responsible for two rounds of bank bailouts worth hundreds of billions of pounds which has given the British state a majority stake in Royal Bank of Scotland (RBS) and huge chunks of other banking groups, Prime Minister Gordon Brown's government has come under intense pressure over the prospect of hefty bonuses being handed to senior executives.
Early editions of this week's Sunday Telegraph newspaper reported that RBS wanted to pay its staff nearly one billion pounds (US$1.48 billion) in bonuses this year.
Darling announced the review in an article in the same paper and said the government could "act to protect people when excessive risk-taking threatens us all.
"I am now setting up a review which will examine how banks are managed," he said. "Bank boards have a duty to ask more searching questions of their executives - when times are good as well as when they turn bad.
"I expect the review to make recommendations about the effectiveness of risk-management by banks' boards, including how pay affects risk-taking...
"Of course, no government should try to remove risk-taking from the system. Nor would we want to.
"But government can act to protect people when excessive risk-taking threatens us all."
The BBC reported that the probe would be fully independent. The Treasury was not immediately contactable for comment.
Responsible for two rounds of bank bailouts worth hundreds of billions of pounds which has given the British state a majority stake in Royal Bank of Scotland (RBS) and huge chunks of other banking groups, Prime Minister Gordon Brown's government has come under intense pressure over the prospect of hefty bonuses being handed to senior executives.
Early editions of this week's Sunday Telegraph newspaper reported that RBS wanted to pay its staff nearly one billion pounds (US$1.48 billion) in bonuses this year.
Darling announced the review in an article in the same paper and said the government could "act to protect people when excessive risk-taking threatens us all.
"I am now setting up a review which will examine how banks are managed," he said. "Bank boards have a duty to ask more searching questions of their executives - when times are good as well as when they turn bad.
"I expect the review to make recommendations about the effectiveness of risk-management by banks' boards, including how pay affects risk-taking...
"Of course, no government should try to remove risk-taking from the system. Nor would we want to.
"But government can act to protect people when excessive risk-taking threatens us all."
The BBC reported that the probe would be fully independent. The Treasury was not immediately contactable for comment.
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