UK Government Warns Banks Over Unjustified Bonuses

The Deputy Prime Minister Nick Clegg has issued a warning to banks that the government will take action over unjustified bonuses. This comes as a stern warning from the government which has ridden to power promising conservatism to protect the interest of the economy in the United Kingdom. This comes at a time when many bankers are planning hefty bonuses for themselves. During an interview with BBC Radio 4's Today Programme, Mr Clegg revealed that banks will face sanctions if they award excessive remuneration packages to staff. He said: "Clearly, if the banks pay themselves unjustified bonuses, we reserve the right to take very serious action on that.” This doesn’t come as a surprise as bankers have been planning for bonuses for themselves. Nick Clegg said "If you abuse the generosity of taxpayers, who have provided a massive infusion of public funds to bail you out, then clearly this government will not be able to stand idly by." Most of the banks in the United Kingdom had requested the government for a bailout from the financial crisis. Now that there are some fresh opportunities in the market unjustified bonuses seems to have returned to the market. Mr Clegg also refused to rule out the possibility of a further bonus levy, following on from the initial temporary bonus tax which was issued by the previous administration. The Centre for Economics and Business Research has estimated that bankers are set to earn around £6.8 billion in bonuses during 2010-11. This has become an embarrassing thing for the government. During the financial crisis there were widespread protests against such bailouts when the bankers were themselves pocketing huge salaries and bonuses. There were cases where bankers were stiffening off hefty bonuses for themselves from the taxpayer’s money which had come in the form a bailout package.

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