BoE's Haldane says bankers' pay should fall further

LONDON (Reuters) - British bankers' pay has further to fall and the banks themselves should be lending more to boost Britain's economy, a senior Bank of England official said on Monday.

Andy Haldane, the BoE's executive director for financial stability, said that in the long run investment bankers' pay should be close to that of doctors or lawyers - rather than several times higher.

"I think we have seen a shift in the right direction ... (but) I'd be very surprised if we didn't see a further ratcheting down," he said in a BBC radio interview.

Haldane, a member of the BoE's Financial Policy Committee, which from next year will take the lead in British bank regulation, also said banks should be lending more.

"We need to get our banking system firing again, to get its mojo back," he said. "There's a reasonable case to be made for banks' balance sheets being a bit clogged up."

The BoE launched a scheme in August that offers banks cheap finance if they lend on to businesses and households. Figures from its first two months of operation released earlier on Monday showed a modest initial take-up.

Last week the FPC said UK banks must bolster their defences against financial shocks as many had underestimated the cost of loans going sour and future fines for misconduct. The FPC will publish details of the discussions on that decision on Tuesday.

Haldane favours tough bank regulations, suggesting Britain may need to cap lenders' size or fully separate their retail and investment operations to curb the risk they pose to the financial system.

He has also said the Basel III accord may be too complicated to be effective, potentially putting him at odds with the BoE's next boss, Bank of Canada Governor Mark Carney, who has helped push through Basel III in his role as head of the G20's Financial Stability Board. Haldane has denied any such rift.

(Reporting by David Milliken and Stephen Addison; Editing by Hugh Lawson)

Source: http://news.yahoo.com/boes-haldane-says-bankers-pay-fall-further-144001465--business.html

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