Top British banker admits 'mistakes' on bonuses

LONDON (AFP) – A top British banker said "mistakes were made" within the industry as bank employees racked up huge bonuses, in an interview with The Sunday Telegraph newspaper.

Bob Diamond (AFP file)

Bob Diamond, the president of British banking group Barclays, said banks had done a "pretty poor job" of handling the bonus process, adding that his company would be deferring up to 60 percent of payouts -- more than double the usual level.

It comes after Britain announced on Wednesday it was slapping a one-off 50-percent tax rate on bonuses above 25,000 pounds (27,600 euros or 40,700 dollars) amid public fury at 70 percent government-owned Royal Bank of Scotland awarding some 1.5 billion pounds in bonuses for senior staff.

"We (the whole banking sector) have done a pretty poor job of managing how the (bonus) process works. We do agree that many functions should have a higher portion of fixed and a lower portion of variable," Diamond said.

He added: "Clearly there were mistakes made and I've made mistakes.

"This isn't about anyone saying I don't have to be part of the solution. It is quite the opposite, it is about saying I do want to be part of the solution."

Diamond also suggested that in future, the government should not have to step in to prop up banks that have got themselves into trouble.

"In principle we should not have institutions that are too big too fail or too complex to fail," he told the weekly broadsheet.

"We need a regulatory framework that allows us to address failing institutions. Big and systemic are not synonymous and big and failure should not be in the same sentence.

"We saw significant failures during the crisis in narrow banking -- narrow investment banking and narrow retail banking.

"We feel strongly that Barclays and others that have the integrated universal banking model, if we took that away it would add risk to the system, it wouldn't take risk away."

A YouGov poll of 2,044 adults on Thursday and Friday for The Sunday Times newspaper found that 79 percent supported the windfall tax on bankers' bonuses, with 11 percent against.

Some 24 percent felt finance minister Alistair Darling was telling the truth about the economy.

Source: AFP

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