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George Osbourne calls for FSA to block excessive bonuses and remuneration

Shadow Chancellor of the Exchequer George Osborne today called for the Financial Services Authority (FSA) to become instrumental in the blocking of large remuneration and bonus packages for UK banks. On a BBC current affairs programme he questioned the right of all UK banks, which have all benefited to some extent from taxpayer investment into the sector, to effectively use taxpayer funding to pay large bonuses and remuneration packages.

This comes at a time when the FSA is in the process of forwarding a questionnaire to all UK banks as it attempts to understand how bonuses are paid and on what basis they are calculated. Whether this is just window dressing ahead of the expected change in banking practices in January 2010 remains to be seen because ultimately even the FSA has not confirmed exactly how it will be able to controll large salaries in the sector.

One of George Osborne's strongest arguments is the fact that whether through direct share investment or else liquidity injected into the money markets, ALL banks in the UK have benefited from taxpayer assistance to some degree. As a consequence, and until all taxpayer funding is repaid, he believes that UK banks should be forced to rein in their remuneration packages with a strict calculation introduced relating to bank finances, remuneration and bonuses.

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