Govt warns banks over bonuses and dividends

Business secretary Vince Cable said banks should be 'very, very self-conscious' about how they reward staff and investors and refused to rule out a tax on bank profits.

Vince Cable today issued a clear warning to the City the Government would be carefully scrutinising bonuses and dividend payouts, just days before the major high street banks begin publishing their latest profit figures, the Guardian reports. In the consultative Green Paper, Financing a Private Sector Recovery, the Government highlighted recent estimates banks could generate an extra £10bn of capital, which in turn could sustain £50bn of new lending, if they limited bonus payments to levels seen before the financial crisis and dividends were pegged at 2009 levels. The Green Paper warn...