Financial Institutions: Financial Stability

House of Lords written question – answered on 6th April 2010.

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Photo of Lord Dykes Lord Dykes Spokesperson for Foreign and Commonwealth Affairs, Spokesperson for Environment, Food and Rural Affairs

To ask Her Majesty's Government what steps they are taking to ensure that executives of financial institutions take decisions which assist long-term financial stability instead of short-term profit.

Photo of Lord Myners Lord Myners Parliamentary Secretary, HM Treasury

The Government have taken measures to ensure factors that contributed to the onset and severity of the financial crisis are not repeated.

Sir David Walker was commissioned to review corporate governance practices in the banking sector and his recommendations will be implemented throughout 2010, while the FSA remuneration code came into force on 1 January 2010 and covers the remuneration paid by large systemic banks operating in the UK. The Financial Services Bill also contains measures intended to strengthen the FSA's hand in its regulatory oversight of remuneration and provide the government with the powers necessary to make requirements for greater disclosure of pay. In addition, the Chancellor announced at Budget that the Government will consider whether institutional shareholder voting disclosure should remain voluntary or become mandatory, and that the Government will also consult on whether there are practical measures to facilitate the consent of owners to executive remuneration arrangements.

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