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EU rules on bankers' pay 'will lead to Goodwin situation'

In a speech warning of the need for EU reform, Chancellor George Osborne said that EU rules on bankers' pay would lead to a "Fred Goodwin-style situation" in which money would not be recoverable

"These European rules will not lead to bankers being paid less," he said. "What they will lead to is a Fred Goodwin-style situation where you will not be able to get money back off bankers when things go wrong."

"That is precisely what we have been trying to get away from in Britain," the Chancellor added.

Read: Osborne: EU must reform or face economic decline

PM backs plans for reckless bankers to face threat of jail

by - Former Business Editor

If you were wondering how many of the ideas put forward by the Banking Commission the Government would take on, the Prime Minister has just made it pretty plain that the plan to create a new offence that could see senior bankers end up in jail will become law.

At Prime Minister's Questions, David Cameron has just suggested that the Government will back the measure, although any new law would almost definitely not apply retrospectively.

So despite the fact the plan has clearly been designed with the former behaviour of bankers like Fred Goodwin in mind, it will not apply to them or any of the other top bosses at the time of the financial crisis.

Almost all of them have departed from their posts already, their reputations severely damaged. But despite some appetite from politicians and some members of the public, it is unlikely any of them will end up behind bars.

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