| Rachel Reeves used her first Mansion House speech last night to do something that would have been unthinkable from her even a few years ago. She said, essentially, that bankers will get their bonuses earlier under Labour. "Post-crisis pay structures made the UK an international outlier on deferral arrangements," she told the swanky annual gathering for the financial services industry. "So we will support [the regulator's] intention to consult on reducing the length of pay deferrals, helping firms to attract and retain talent." Cut through the flowery language and the chancellor is saying — as she confirmed to Channel 5 today — that yes, bankers can expect faster payouts. It's part of a wider bonfire of regulations in the sector. Reeves is supporting something that was already in train with the regulator — which has been holding a consultation on reducing the deferral time on bonuses from eight years to five. But zoom out, and it's really quite extraordinary. As a young shadow chief secretary to the Treasury in 2012, Reeves was among those calling for tougher action on bankers' bonuses in the wake of the global financial crash. Now she's running the economy, and declaring that the crackdown on banks after 2008 went "too far."  The room where it happened. Photographer: Isabel Infantes/Reuters "The UK has been regulating for risk, but not regulating for growth," Reeves said. "That has gone too far and, in places, it has had unintended consequences that we must now address." So she has given regulators a new remit to support growth, and has announced a consultation on the so-called Senior Managers and Certification Regime — the rules on bankers that were introduced post-2008 to ensure senior executives can be held to account for misconduct that occurs on their watch. Reeves said the rules that apply to staff below senior levels have become "overly costly and administratively burdensome." All of this was music to the audience's ears last night, after a budget that didn't exactly set hearts racing in the business community. As my colleagues write, "a growing chorus of executives from across the City have said it's the UK's regulatory regime preventing more investment into British stocks, especially finance firms." Reeves attempted to counter those concerns as she laid on the flattery, describing financial services as the country's "crown jewel" and noting it accounts for 9% of the UK's economic output. Of course, none of this will be comfortable reading for the average Labour MP. It even prompted a note of caution from one of the regulators. "The Chancellor set the tone yesterday in terms of understanding that with risk there also comes challenge, there may also come failure," the Financial Conduct Authority Chief Executive Nikhil Rathi told the Today program. "There needs to be a degree of political acceptance of that. As long as that's there, I think we can navigate through this and deliver the growth and support that the country needs." Reeves is hoping that with increased risk, there will also be rewards. With growth figures coming in slower than forecast this morning, she'll need them more than ever. Want this in your inbox each weekday? You can sign up here. | 
No comments:
Post a Comment