Bonus ban bad for business, warns Barclays boss

Barclays - set for bonuses revival

The row over bonuses exploded back into the headlines last week after reports from Wall Street that a "bonus bonanza" is in on the cards. Now the chairman of Barclays warns a proposed clampdown on bonuses could destroy London's status as a financial centre.

Marcus Agius, Barclay's chairman, has reportedly said that if regulators in the UK come down too hard on pay, banks in the City would most likely move their operations to countries with less cumbersome rules.

Agius expressed particular concern that there should be a "level playing field" across the industry, inciting that "regulatory gaming wouldn't be a good idea for the City of London."

The comments are particularly interesting, given that Barclays itself is likely to hand out colossal bonuses to traders at its investment banking arm, BarCap, at the end of this year.

Concerns over the bonus scandal have been heightened after moves by the G20 leaders at last month's summit in Pittsburgh, USA, where leaders agreed on tighter regulations relating to pay.

It is now up to individual nations to implement such rules. However, as no caps on bonuses were reached at the summit, the bonus debacle has now been pushed back into the limelight.

In the UK it emerged last weekend that Royal Bank of Scotland (RBS), which is 70 percent owned by the taxpayer, is now anticipating plans to hand out record bonuses at the end of the year. Bonuses, reports suggest, would rival those handed out at the height of the financial boom.

Greed

There is concern that such moves by RBS would exacerbate the anger of UK taxpayers, who would see handouts as a mockery of the GBP£20 billion bailout issued by the government.

Bankers' bonuses, and the widely-reported greed of traders in financial centres across the globe, have now become synonymous with the economic meltdown.

As such, the plans being touted by RBS - a further sign that bonus culture is returning - is sparking anger from consumers.

Regulation

Thankfully, to pay bonuses like those outlined in recent reports, RBS's plan would have to be approved by UK Financial Investments, the organisation which oversees taxpayers' investments in banks.

A spokesman for did comment that: "No formal decisions have been taken on bonuses. They are made based on the figures at the end of our financial year in December.'

Barclays, meanwhile, is on track to post record profits in 2009, which is likely trigger another round of multi-million pound bonuses.

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