Sunday 18 August 2019

D'Arcy vows to halt return of bonuses for bankers

Recruitment concerns: Sharon Donnery. Photo: Gareth Chaney, Collins
Recruitment concerns: Sharon Donnery. Photo: Gareth Chaney, Collins

Hugh O'Connell and Kevin Doyle

Junior Finance Minister Michael D'Arcy has said that all existing restrictions on bankers' pay and bonuses should remain in place.

Mr D'Arcy told the Irish Independent that as well as keeping pay capped at €500,000 for senior bankers, the effective bonus ban - via an 89pc special tax - should also be maintained.

It comes despite growing calls from the sector for the return of bonuses. Acting governor of the Central Bank Sharon Donnery suggested yesterday there should be some "exceptions" to the ban on bonus payments for certain bank staff.

But Mr D'Arcy appeared to rule this out.

"I am of the view that €500,000 is a very significant salary, it's enough, it's a more than sufficient salary [and] no, there shouldn't be any reintroduction of bonuses," Mr D'Arcy said. "As long as the State has an interest [in the banks], that's my opinion."

The Fine Gael TD said it was a "personal view" and that he had not yet seen a report on bankers' remuneration by consultants Korn Ferry that was delivered to Finance Minister Paschal Donohoe in recent weeks. In response to Mr D'Arcy's remarks, a spokesperson for the Department of Finance said Mr Donohoe was still considering the report and "will engage further with his Cabinet colleagues on the matter in due course".

But Ms Donnery said the regulatory environment around banks was now very different when compared to the situation during the Celtic Tiger.

Speaking to the media at the MacGill Summer School in Glenties, Co Donegal, Ms Donnery said while the restrictions were a matter for the minister, there were concerns about the ability of banks to recruit specialists in areas of compliance, risk and IT.

"There is big demand for people and it may be the case that the banks are losing people that they need," she said.

"There are particular areas where we see concerns in the banks. It's not simply the case that the banks are concerned, but where we see particular roles around risk management, cyber-security and so on, where there are more challenges."

She said 'exceptions' need not necessarily apply to the €500,000 cap on bankers' pay but "more to bonuses and incentivisation and so on".

Fianna Fáil finance spokesman Michael McGrath said restrictions on bankers' pay and bonuses should not be lifted until the tracker scandal was dealt with and bankers were held accountable.

Ms Donnery has said the Government needs to start using corporation tax windfalls to create a buffer against the next downturn.

She urged Mr Donohoe to create "a clear strategy guiding the use of unanticipated revenue".

Irish Independent

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