Britain's Standard Chartered hits out at regulation

“The reality is that a lot of that incremental cost will just get passed on to their customers in terms of increased pricing,” Sands said in an interview with The Financial Times. “This is not a risk-free, cost-free game here.”

The comments come as Prime Minister Gordon Brown is set to announce Wednesday new powers for British regulators to tear up bankers' contracts if they include excessive pay and bonus deals which threaten the financial system.

“It seems to be impractical and contrary to the government's intention of trying to move forward in a globally coordinated fashion,” Sands said. “This could undoubtedly harm London as a global financial center.”

Some observers blame the bonus culture of the world's two pre-eminent financial sectors -- the City of London and Wall Street -- for encouraging excessive risk-taking, which helped to tip the global economy into chaos.

Sands said there was already evidence that bonus guidelines drawn up at the G-20 summit of world leaders in September to defer payments and link them to shares in their bank were warping competition. He said the measures were being swiftly introduced in Europe but not elsewhere.

Standard Chartered, an emerging markets bank, had lost out to Asian rivals in battles to recruit top bankers because new British rules ban paying guaranteed bonuses, he said. “That is a practical problem right now.”

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email