Regulators who oversaw the banking system before the recent financial crisis will be paid bonuses this year even though their boss admitted the watchdog had failed to foresee the risks ahead. Adair Turner, chairman of the Financial Services Authority, said: “At the level of the whole world there was a failure to see enormous risks developing in our financial system.” But he insisted his staff had done “pretty good work” and earned their bonuses. The move may cause anger in the City, since the Government is trying to force banks to curb staff bonuses for bankers. Lord Turner said the FSA was considering using its regulatory powers to force banks to keep their own bonuses down this year. Alistair Darling, the Chancellor, stressed the point yesterday: “We don\’t expect many bonuses at all to be paid in the banking system next year.”
What\’s that line about one rule for us and another for them?
This was at least as much a failure of regulation as it was a failure of anything else. But no regulators are going to lose their jobs, unlike bankers, no regulators are losing their equity in the company they work for (obviously, as they don\’t have any) and now they\’re not going to lose their bonuses either. Indeed, Turner has been calling for pay rises for them.
Hypocrisy, thy name is government.