CGT rise could hurt venture capital sector

Date: 29/06/2010

British banks could be forced to limit their reward and recognition programs in the wake of the global economic crisis.

The Bank of England has called on companies operating in the financial services sector to limit their sales incentives as a means of shoring up their balance sheets.

In its recent Financial Stability Report, the Bank of England claimed that cutting reward and recognition for top executives would allow institutions to focus on boosting lending, which, in turn, would help the UK economy achieve sustained growth.

"This would require banks to double their efforts to contain discretionary distributions to shareholders and staff," the regulator claimed.

"The benefits of more concerted action are potentially considerable," it added.

However, the Bank also claimed that an extended transition period would help lenders maintain their profitability once the reduced remuneration policies were in place.

Commenting on the recent G20 Summit in Toronto, the British Bankers' Association said discussions had been productive and resulted in a "restructuring of the financial sector".

Written by Jo Morgan ADNFCR-2060-ID-19862789-ADNFCR

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CGT rise could hurt venture capital sector

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