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Deputy BoE governor: Bonus delay should be increased

Deputy governor of the Bank of England Andrew Bailey has told ITV News that the three-year deferral of bankers' bonuses should be increased but played down suggestions of a decade-long delay.

The Parliamentary Commission on Banking Standards previously suggested up to a 10-year bonus delay but Mr Bailey suggested the time limit implemented should "probably be somewhere in between" three years and a decade.

He told ITV News Economics Editor Richard Edgar: "The reason deferral matters, to coin a phrase, is that it creates skin in the game.

"The skin in the game is that the deferred but unpaid money can be taken back and a lot more of that taking back goes on now than took place in the past, so when problems subsequently emerge which cause costs to banks and their customers that deferred remuneration can be hit and it is.

"But I would like to see deferral increased."

Read: Deputy BoE governor warns of more action on bankers' bonuses

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Santander fined £12.4m over 'flawed' advice

The FCA found Santander's investment advice to be flawed.
The FCA found Santander's investment advice to be flawed. Credit: John Stillwell /PA Wire

High street lender Santander has been fined £12.4 million after the City watchdog uncovered "serious failings" in investment advice provided by the bank.

The Financial Conduct Authority (FCA) said Santander's advice was flawed after it found staff were not being trained properly and failed to get to grips with customers' personal circumstances and the level of risk they were prepared to take.

The bank also failed to ensure information was clear and did not make regular ongoing checks that investments were still suitable.

Santander said it has since closed its old bancassurance businesses and overhauled branch-based investment advice.

It will contact affected customers and compensate those left out of pocket, but the FCA said redress was likely to be minimal given that investment returns have been boosted by rising stock markets in recent years.

£4.2 billion raised in selling taxpayer's Lloyds shares

As the government confirmed it has sold more of its stake in Lloyds Bank, ITV News Business Editor Joel Hills looks at what that means for the tax payer and the company:

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UKFI says overnight it raised £4.2 billion by selling more of the taxpayer's stake in Lloyds. Got 75.5p/share, market close yesterday 79p.

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Our stake in Lloyds has fallen to 24.9% - in the City when a company owns 25% of another company it is deemed a controlling shareholder.

Read more: Government looks to reduce taxpayer stake in Lloyds

UKFI is a company with HM Treasury as its sole shareholder which is mandated to manage the Treasury's shareholdings.

Treasury confirms it has sold 7.8% of Lloyds shares

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Government has sold 7.8% of shares in Lloyds Banking Group, at 75.5p per share.

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Govt stake in Lloyds now less than 25%. Part of our long term economic plan to deliver economic security

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Co-op Bank boss 'set for £3.6m pay deal'

A branch of the Co-operative Bank
The Co-operative Bank is reportedly set to hand its new chief executive a £3.6m pay deal Credit: Rui Vieira/PA Wire

The Co-operative is to hand a £3.6 million pay deal to its chief executive, according to reports - despite facing a £2 billion loss after the biggest crisis in its history.

According to the Observer, Euan Sutherland will receive a base salary of £1.5 million this year, plus a £1.5 million retention payment. He joined the company in May last year, having been chief operating officer of B&Q owner Kingfisher.

The mutual argues that Mr Sutherland's proposed remuneration package will be in line with comparable firms and reflects the scale of the task he faces, the paper says.

But the pay award would come at a time when the group is facing large-scale job cuts after a disastrous year in which its banking arm needed rescuing due to a £1.5 billion hole in its balance sheet.

Scottish independence causes banking uncertainty

by - ITV News Correspondent

There's a picture emerging of a nervousness across the finance sector north of the border, after Lloyds and Barclays warned that a vote for Scottish independence may carry risks and costs for them.

Financial institutions have warned of the uncertainty that may follow a Scottish independence vote
Financial institutions have warned of the uncertainty that may follow a Scottish independence vote Credit: David Cheskin/PA Archive/Press Association Images

There was even talk emerging today of Lloyds and RBS having to move their headquarters south in the event of independence.

That's because it seems there is an old European diktat that says a finance house must be headquartered where most of its customers live - in both those cases, that would be in England.

Barclays has warned of risks linked to possible Scottish independence
Barclays has warned of risks linked to possible Scottish independence Credit: Dominic Lipinski/PA Wire/Press Association Images

So that would be bad news potentially for jobs in Scotland, and bad news certainly for the prestige of Edinburgh as a major finance hub.

However, George Osborne has warned in the past of a bloated finance sector that Scotland couldn't support in the event of a financial crisis.

Lloyds and RBS may be forced to move their headquarters to England if independence occurred
Lloyds and RBS may be forced to move their headquarters to England if independence occurred Credit: John Stillwell/PA Wire/Press Association Images

But if their headquarters weren't in Scotland, it wouldn't be their problem - it would be England's.

So as ever on this topic, there's more than one way to look at any of the issues that emerge.

Read: Lloyds and Barclays warn of risk of Scottish independence

Read: Swinney says Lloyds comments 'back up currency case'

Barclays warns of Scottish independence instability

Barclays bank has warned that the upcoming vote on Scottish independence could "affect the group's risk profile" by potentially destabilising financial markets.

Barclays bank has warned that the Scottish independence vote could increase the group's financial risk
Barclays bank has warned that the Scottish independence vote could increase the group's financial risk Credit: Dominic Lipinski/PA Wire/Press Association Images

Barclays' warning follows concerns expressed by several other financial institutions about the effect of the independence vote, including Lloyds Banking Group, RBS and Standard Life.

Barclays said: "The referenda on Scottish independence in September 2014 and on UK membership of the European Union (expected before 2017) may affect the Group’s risk profile through introducing potentially significant new uncertainties and instability in financial markets."

Barclays said the vote could bring uncertainty "both ahead of the respective dates for these referenda and, depending on the outcomes, after the event".

Read: Standard Life could quit independent Scotland

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