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Business secretary insists no gap between what action the government is taking on bonuses and pledges made in the coalition agreement
Vince Cable is yet to be convinced that bankers have "got the message" about big bonuses despite their attempts to show restraint.
The Liberal Democrat business secretary, who is believed to be at odds with the Conservative chancellor George Osborne about how to tackle bonuses, said he was "not persuaded they [banks] have yet got the message".
On BBC Radio 4's Today programme, Cable acknowledged that bankers were in talks to try to agree a way reduce their bonuses pools. Standard Chartered, based in London but largely focused overseas, has pulled out of the discussions. Those still involved include Royal Bank of Scotland, Lloyds Banking Group, HSBC and Barclays, whose outgoing chief executive John Varley is trying to lead the negotiations.
Cable said: "We do understand there are conversations taking place between the banks to exercise some self-restraint.
"We have a process in government where we are beginning to discuss these issues with the banks, so we look forward to what they have to say."
The banks are hoping that by showing restraint they can avoid extra taxes on their profits and bonus pools but sources close to the talks concede the banks may not be offering enough to appease the government. The banks are also considering contributing funds to David Cameron's "big society" bank and make pledges to lend to businesses – again in an effort to head off government policies.
Osborne has currently stepped back from plans, initiated by the Labour government, to demand that bankers disclose how many of their employees earn more than £500,000 a year. The Labour proposals were based on a review by City grandee Sir David Walker who this week stunned observers by backing away from his recommendations on disclosure by saying an international agreement needed to be reached.
Osborne is now writing to Europe to try to reach agreement on such disclosure, which goes further than European rules, which only require the overall bonus pot to be published.
Cable told Today: "It could be done through international banking regulation, which is what the chancellor is trying to do at the moment. It could be done through domestic law. There will almost certainly have to be a combination of the two, but it does not have to happen simply through banking regulation."
Cable insisted that there was not a "gap" between what the government was doing and its pledges to clamp down on unacceptable bonuses set out in the coalition agreement for government.
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