Is the period of reward for failure coming to an end?

The Financial Services Authority (FSA) has today confirmed that in the future new rules on remuneration will relate to 2,500 companies in the UK as opposed to just 27 at the moment. The "new" remuneration code will bring in a number of factors currently being discussed by the European Union and effectively end a period of "rewards for failure". So will this end excessive risk-taking?

There's no doubt that a number of companies in the UK are still sailing very close to the wind with regards to current remuneration regulations and risk assessment. The financial industry is one which will obviously grab the headlines with regards to bonuses in the future but it is also an industry which needs innovative players and people who "think outside the box". Whether a reduction in the remuneration packages available, seen by some as a tax on new ideas, will have an impact on the competitiveness of the UK financial industry remains to be seen.

The problem which the UK authorities have at the moment is the fact that if they "overstep their competitors with regards to new regulations" this will effectively swing the balance of power away from the UK. A very risky strategy in anybody's book!