Bailey: ‘Government not asked for more bank cash’
Some of Britain’s banks need more capital but the UK government has not been asked to put cash into Royal Bank of Scotland or Lloyds, the UK’s top banking supervisor said yesterday.
Andrew Bailey, pictured, is due to present a report on capitalisation of UK banks to the Bank of England’s financial policy committee next week.
“I agree there is a need to strengthen the capital position, but I am not going to go into detail,” Bailey told Parliament’s Treasury select committee.
“I have not asked the government to put capital into RBS or Lloyds,” said Bailey, who has been appointed a deputy governor of the Bank of England, in charge of prudential regulation.
The restructuring of banks should be a precursor to raising more capital, he added.
Bailey has had “conversations” with RBS about its restructuring in preparation for possible full privatisation of the government’s controlling stake in the bank.
Turning to bankers’ bonuses, he said that Britain’s main banks could bump up fixed pay for top staff by £500 million to get around a proposed European Union cap.
The EU is finalising a new law that would limit bonuses to no more than fixed salaries, with the option of increasing this to up to double fixed salary salaries if shareholders give their approval.
“It’s being driven by popular anti-bank sentiment,” Bailey said of the proposed cap. “It won’t have the effect of reducing overall remuneration.”