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Minister attacks banking bosses Minister attacks banking bosses
(about 6 hours later)
Banks and their "grossly over-rewarded" executives are partly to blame for causing the economic recession, a government minister has said.Banks and their "grossly over-rewarded" executives are partly to blame for causing the economic recession, a government minister has said.
In an interview with the Times, City minister Lord Myners said the "golden days of huge bonuses" were over.In an interview with the Times, City minister Lord Myners said the "golden days of huge bonuses" were over.
Executives had "no sense of the broader society around them", he added.Executives had "no sense of the broader society around them", he added.
BBC political correspondent Iain Watson said the Treasury was seeking to distance itself from the tone of the comments, without disputing them. Lord Myners, the financial services secretary, said the bank system came close to collapse last October, before the government's £500bn rescue package.
A Treasury spokesman said these were Lord Myners' private views, and were not the words of the chancellor or Treasury.
I have met more masters of the universe than I would like to, people who were grossly over-rewarded Lord Myners,Financial Services SecretaryI have met more masters of the universe than I would like to, people who were grossly over-rewarded Lord Myners,Financial Services Secretary
In the interview, Lord Myners, the financial services secretary, also revealed the bank system came close to collapse last October, ahead of the government's £500bn rescue package.In the interview, Lord Myners, the financial services secretary, also revealed the bank system came close to collapse last October, ahead of the government's £500bn rescue package.
"There were two or three hours when things felt very bad, nervous and fragile," he said."There were two or three hours when things felt very bad, nervous and fragile," he said.
"Major depositors were trying to withdraw - and willing to pay penalties for early withdrawal - from a number of large banks." FROM THE TODAY PROGRAMME More from Today programme"Major depositors were trying to withdraw - and willing to pay penalties for early withdrawal - from a number of large banks." FROM THE TODAY PROGRAMME More from Today programme
He said: "I have met more masters of the universe than I would like to, people who were grossly over-rewarded and did not recognise that. Some of that is pretty unpalatable.He said: "I have met more masters of the universe than I would like to, people who were grossly over-rewarded and did not recognise that. Some of that is pretty unpalatable.
"They are people who have no sense of the broader society around them. There is quite a lot of annoyance and much of that is justified."They are people who have no sense of the broader society around them. There is quite a lot of annoyance and much of that is justified.
"Let us be quite clear: there has been mismanagement of our banks.""Let us be quite clear: there has been mismanagement of our banks."
KnighthoodsKnighthoods
He also told the newspaper he could see no economic justification for the exponential rises in pay over the past 20 years.He also told the newspaper he could see no economic justification for the exponential rises in pay over the past 20 years.
Bank executives should decide for themselves whether to pay back their bonuses or lose knighthoods, he added.Bank executives should decide for themselves whether to pay back their bonuses or lose knighthoods, he added.
This week, the UK officially went into recession after two consecutive quarters of negative economic growth - the widely accepted definition.This week, the UK officially went into recession after two consecutive quarters of negative economic growth - the widely accepted definition.
Gross domestic product fell by 1.5% in the last three months of 2008 after a 0.6% drop in the previous quarter.Gross domestic product fell by 1.5% in the last three months of 2008 after a 0.6% drop in the previous quarter.
It represents the biggest quarter-on-quarter decline since 1980, and a 1.8% fall on the same quarter a year ago.It represents the biggest quarter-on-quarter decline since 1980, and a 1.8% fall on the same quarter a year ago.