In addition, we will also learn more about the pay and bonuses being awarded to senior people at the two banks where taxpayers have huge stakes, Lloyds and Royal Bank of Scotland.
And the equity capital will in theory be directed to the private sector in regions most hurt by public spending cuts. This is supposed to help fill what is traditionally known as the "equity gap" for smaller growth businesses in the UK (Germany's competitive advantage over the UK has long been seen in terms of how its smaller businesses find it easier to obtain long term finance). This is designed to make it easier for shareholders to hold the banks to account for what they pay.ĩ) The banks are providing £200m of capital for David Cameron's cherished Big Society Bank, which is supposed to finance community projects.ġ0) The banks are providing £1bn of equity capital (or risk capital) over three years for small businesses in hard-pressed parts of the UK, on top of the £1.5bn of equity capital they have pledged over ten years (ministers insist this £1bn is additional capital bankers in recent days have been less clear about that). On paper at least, the UK will have the most transparent regime for bankers' remuneration in the world.Ĩ) The remuneration committees of big British banks will commit that they will henceforth sign off the pay of the ten highest paid individuals in each business division. This new disclosure requirement will apply to the UK operations of overseas banks such as Goldman Sachs and UBS.
#Merlin project management review 2011 plus
The pay of board members already has to be disclosed.ħ) The government will legislate so that from 2012 all big banks in the UK will be forced to publish the pay of their board members plus the eight highest paid executives below board level. This is probably the most important commitment in Merlin, in that it is small businesses that have been complaining of being starved of vital finance.ģ) The Bank of England will monitor whether the funds are being made available to businesses and will publish quarterly assessments.Ĥ) Among the performance targets used to determine bonuses of bank chief executives will be whether they are providing the promised credit to business (this in broad terms is already the case for Stephen Hester at RBS and Antonia Horta Orsorio at Lloyds).ĥ) The chairmen of banks' remuneration committees are writing to the chairman of the Financial Services Authority warranting that they are cutting the amount provided for bonuses in relation to 2010 performance as a direct consequence of their negotiations with ministers.Ħ) In their coming results, RBS, HSBC, Lloyds and Barclays (known as the Merlin banks) will publish the pay of their five highest paid executives below board level (but not the pay of traders who don't have management responsibility). On the question of whether the funds being made available for business will actually be lent, the Treasury points out that in 2010 RBS and Lloyds lent more than they promised to do - so the Treasury is hopeful that bankers will again exceed the targets.Ģ) Of this lending commitment, £76bn will be made available for smaller businesses, which represents an increase of £10bn or 15% in credit available to SMEs in 2010. Lloyds and Barclays) plus Santander will commit to make available £190bn of credit to business in 2011, up from £179bn in 2010. Here are the main details of the long-awaited Project Merlin deal between the government and the Treasury.ġ) As expected, the four biggest British banks (RBS, HSBC.
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