House of Commons - Banking Crisis: reforming corporate governance and pay in the City - Treasury

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House of Commons

Session 2008-09
Publications on the internet
Treasury Committee Publications

Treasury - Ninth Report
Banking Crisis: reforming corporate governance and pay in the City

Here you can browse the report together with the Proceedings of the Committee. The published report was ordered by the House of Commons to be printed 12 May 2009.

Contents

Terms of Reference

Summary
1  Introduction
2  Remuneration in the banking sector

Introduction

Salary levels in the banking sector
Remuneration in the investment banks

Remuneration practices and the banking crisis
The framework for executive remuneration
Reforming bank remuneration practices

The FSA's approach to date
The FSA's proposals for the future
Regulating pay levels
Clawback, bonus deferral, and share-based remuneration
Bonuses as a proportion of total remuneration
Share-based remuneration
Reforms to remuneration practices in the banking sector

The role of shareholders in remuneration
Remuneration committees and the role of non-executive directors
Remuneration consultants

3  Remuneration policy in the part-nationalised banks

Remuneration policy at RBS and Lloyds Banking Group
Sir Fred Goodwin's pension

The nature of Sir Fred Goodwin's pension
The Government's role in negotiating the pension
Conclusions

4  Corporate governance

The role of the Board
Non-executive Directors

The role of non-executive directors
Banking experience and qualifications

Risk management by the board
Shareholders

Shareholder engagement with the banks
Reasons for shareholder ineffectiveness

5  Credit Rating Agencies

The role of credit rating agencies in the banking crisis
Quality of ratings
Prospects for reform of credit rating agencies

Conflicts of interest
Combating over-reliance; the role of transparency
Global coordination and assigning responsibilities

6  Auditors

The performance of auditors
Should the role of auditors be redefined?
Links between auditors and the FSA
Conflicts of interest
Going concern
Financial reporting

7  Fair value accounting

Fair value accounting in the banking crisis
Fair value accounting and procyclicality
Response by the IASB

8  The role of the media

Blaming the messenger?
Regulation of the media

Conclusions and recommendations
Formal minutes
Reports from the Treasury Committee during the current Parliament

© Parliamentary copyright 2009
Prepared 15 May 2009