One of Wales’ Euro-MPs has called for banks to boost lending to businesses in Wales after new rules were approved today in the European Parliament to crack down on bankers' bonuses.
Welsh Labour MEP, DEREK VAUGHAN said:
"Local companies are struggling to get the credit they need to maintain and grow their business, yet last year British banks paid an extra £10 billion to themselves in bonuses - money that could have supported billions in lending to the real economy here in Wales.
Today's vote will bring an end to the short-term, high-risk culture that was the cause of the financial crisis. Banks must prioritise support for our economic recovery, not their own pay and perks."
MEPs in Strasbourg today (Wednesday 7 July) backed Labour's proposals to change the way bankers' bonuses are paid. They include provisions to limit the amount of cash that can be paid upfront, so that if investments go bad money can be clawed back.
The new law will be implemented in time for the upcoming bonus season in January 2011.
Mr Vaughan added:
"At a time when the UK coalition government is making substantial cuts, scaling back public services and support to families and businesses, my constituents expect banks to prioritise stability and lending over excessive bonuses.
The banks have had two years since the 2008 financial crisis to do this and have failed to act, so now we have done the job for them."
The rules will also regulate the way exceptional pension payments are used to reward bankers.
Mr Vaughan said:
"We have seen bank chiefs walk away from the ruins of their firm with a £16 million bonus pot, while taxpayers pick up the bill. These new rules will ensure this can never happen again."