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Crackdown on excessive pay.

THE mega-bonus pay culture among banks encouraged a "lethal combination of reckless and excessive risk-taking", MPs said today.

The Treasury Select Committee's report on bank pay said the banking crisis had "exposed serious flaws and shortcomings" in remuneration policies.

It also slammed bonus schemes for encouraging risk-taking at the expense of shareholder interests and the long-term health of the banks themselves.

MPs called on the Financial Services Authority regulator to make tackling pay reform a higher priority.

"We are concerned the FSA seems not to be taking tackling this issue seriously enough," committee chairman John McFall said.

The report highlighted practices such as cash bonuses made immediately regardless of the long-term impact of a deal or transaction.

MPs urged the City watchdog "not to shy away" from using powers to sanction firms over poor pay practices..
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Publication:Evening Chronicle (Newcastle, England)
Date:May 15, 2009
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