LONDON (Reuters) - Banks have still failed to grasp the need to reform their bonus culture, but Britain is unwilling to legislate to force them to take action, Chancellor Alistair Darling said in a newspaper interview on Friday.
Speaking to the Wall Street Journal’s European edition, Darling said many banking executives appear to have forgotten that public money bailed out large parts of their industry.
“The mentality in the boardroom seems to ignore the fact everybody else in the country has helped them out,” Darling was quoted as saying. “There are far too many people in the banking world who haven’t caught the change in sentiment. There has to be a change in culture.”
The question of bankers’ bonuses has triggered a political and public outcry in Britain and around the world and prompted calls for tougher curbs on their pay packages.
Despite the state aid that rescued parts of the banking industry, Darling said some bank bosses had sought a return to pre-crisis bonus pools.
“The first instincts of too many people in these institutions is to say ‘what can we pay out’, rather than ‘what can we pay in’,” Darling said.
However, he again ruled out passing new laws to limit bonuses and said taking such a move unilaterally would harm the economy.
“I do not want to disadvantage Britain,” Darling added.
Britain last week ploughed another 30 billion pounds into the country’s banks as part of a major restructuring forced by European Union competition rules.
That followed a huge government bailout last year which saw Britain take stakes in its major banks to prevent a financial collapse.
Darling said former shareholders of the nation’s failed banks must shoulder part of the blame.
“They didn’t take their stewardship seriously,” he said. “There are huge questions to be asked about the role of shareholders in these businesses.”
On the global economy, Darling said there was “still a lot of uncertainty around” and more risks to be negotiated, such as rising unemployment in the United States.
Reporting by Peter Griffiths; editing by Chris Pizzey
Our Standards: The Thomson Reuters Trust Principles.