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Outrage as bonuses on the way back for bankers

FAT-cat bankers could soon be back in the money -- but of course you'll be paying.

Finance Minister Michael Noonan was slammed today after it emerged that top bank executives are in line to receive bonuses again.

The news will stun taxpayers at a time when State-controlled AIB is threatening to charge customers for not having enough money sitting in their deposit accounts.

Mr Noonan has opened up the possibility of the incentives being paid with new rules on how the Government oversees the bailed-out lenders.

This could clear the way for bank bosses -- who are supposed to be subject to a €500,000 pay cap -- earning thousands in extra payments.

Despite the Department of Finance stating there has been no change of policy, it is understood "incentive arrangements" could, in principle, be extended to top executives as early as next year.



Failure

But Dublin senator Darragh O'Brien told the Herald it was "too early" for Mr Noonan to be taking this step.

The Fianna Fail politician said the news should be viewed in conjunction with the recent "significant" breaches of the pay cap for bankers.

The senator contrasted it with what he said was a failure to tackle AIB for imposing bank charges on people who have less than €2,500 in their account and Bank of Ireland for not passing on the "vast majority" of the two European Central Bank rate cuts.

A Department of Finance spokesman said the new guidelines come under the heading of a relationship framework which will not come into play until the banks return to profitability.

"They are setting out the relationship between the state and the banks ... in the short-term, medium-term and long-term," he told the Herald.

He said the framework in no way supersedes the prohibition on bank bonuses currently in place.

The spokesman denied there was a contradiction, saying the relationship rules ensure "any incentives must be linked to the profitability of the banks".

Fianna Fail finance spokesman Michael McGrath told the Herald that "any suggestion" of paying bonuses to top executives in the bailed-out banks is "highly inappropriate and "premature".

All State-supported banks were banned from paying bonuses soon after they were rescued with billions of taxpayers' money.

However, reports today reveal new rules on how the Government oversees the lenders banks pave the way for "incentive arrangements" at AIB, Permanent TSB and Anglo Irish Bank, now called Irish Bank Resolution Corporation.

The incentives must be closely related to the performance of executives and the achievement of business plans.

comurphy@herald.ie


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