Unbelievable - now City banks watchdog gets set to pay itself £33m in bonuses
EXECUTIVES at the City watchdog charged with clamping down on abuses by fat-cat bankers are set to pay themselves £33million in bonuses, it emerged yesterday.
The Financial Services Authority, charged with regulating the banks, has already come under fire for failing to anticipate the financial crisis.
But yesterday it stood accused of gross hypocrisy after announcing it would pay its own executives massive bonuses while asking struggling firms to shell out a further £117million to help it better police the financial sector.
Only this week the Daily Express highlighted the luxury lifestyle of bankers paid huge bonuses despite their empires having to be shored up by the taxpayer.
Bonuses for the top three FSA offi - cials, including chief executive Hector Sants, are to be decided next month by its board remuneration committee. In 2007/8, Mr Sants was paid £662,000 including a £114,000 bonus.
The bank regulator is raising staff bonuses from a maximum of 12.5 per cent of pay to 15 per cent, requiring it to pay out up to £23million this year.
It is also earmarking an extra £10million to give rises to staff whose pay was "out of kilter" with market rates.
The FSA said that it needed to introduce a new reward strategy to improve the performance of its 2,800 employees.
But Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "It is disgusting that the FSA is using this crisis, which it failed to regulate against, as an excuse to empire build and claim huge bonuses.
"The Government has rightly criticised rewards for failure in the City, so there must be no rewards paid out to the failed FSA either."
Those who have to pay money to the regulator were also furious. One small business director said: "What sort of message does this send out? They are meant to be stemming the culture of greed and here they are feathering their own nests - with our money."
Another business leader said: "This is typical of the public sector. Small businesses like mine will now have to pay more to the FSA because of both their and the banks' utter incompetence.
"This is a rise of 36 per cent on their budget and is clearly nonsense when you look at how much the likes of Sir James Crosby (former FSA deputy chairman) have been paying themselves."
Plans for potentially bigger bonuses and a new pay top-up scheme - described by the FSA as "a talent management initiative" - come just days after Sir James resigned amid allegations that, when he ran HBOS, he sacked a senior whistleblower who warned that the bank was taking excessive risks.
Mr Sants has defended the pay topups by saying that the FSA needed to tackle "signifi cant salary anomalies" for its accountants, management consultants and risk analysts - jobs for which market pay rates had not sunk in the wake of the credit crunch.
"The salaries we offer must be comparable with the external market for relevant fi nancial services skills, " he said.
The bonuses were "not in the same quantum" as bonuses paid in investment banks, " adding: "In the last 12 months, our staff have done a very good job in extremely tough circumstances."
The FSA said it would need the extra £117million from firms to help it meet its "demanding priorities". Two-thirds of the new recruits will be in place by April with the rest joining later in the year.
Around £70million of the extra funding is due to go towards its supervisory role in firms with a "high impact" on the economy, such as banks.
