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Peter Mandelson joins the argument regarding City bonuses

The UK government has again stepped in to attack the Financial Services Authority (FSA) and the ongoing attempt to curb bonuses and remuneration packages in the City. While Lord Mandelson himself, and his fellow MPs, are no strangers to the more lucrative end of the bonus and remuneration package market they have threatened legal action against the banking industry as a means of curbing future payouts. But how will this work?

The truth is, and the authorities are well aware of this, legislation to curb free-market bonuses and remuneration packages is something of a no-go although public fury may well dampen payments in the short term. The fact is that when the UK government had the opportunity to force banks and financial institutions to sign up to various guidelines and regulations, i.e. when they handed over billions upon billions of pounds of taxpayer's money to save them, they failed miserably to pin them down to any criteria and any timescale.

As we approach the next general election many MPs and members of the government are desperate to pin the blame elsewhere and accuse other parties, such as the FSA, of wasting billions upon billions of pounds of taxpayer's money. The truth is, as we have said on numerous occasions, the banking industry is an integral part of the UK economy and as such is more powerful as a sector than the UK government and the UK regulators put together.

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