UK government, banks strike deal on lending, bonuses
10 Feb 2011
The UK government yesterday struck a key deal with the nation's four biggest banks, the 'Project Merlyn deal', under which the banks agreed to boost their lending, curtail
bonuses, increase transparency and support regional economic growth.
Under the agreement, the four banks, HSBC, Lloyds, RBS and Barclays, along with Santander would increase their business lending to £190 billion in 2011, up from £179 billion in 2010.
Of the total lending commitment, £76 billion would be made available for small and medium-sized enterprises (SMEs), representing a 15-per cent increase over last year's £66- billion lending support.
The nation's central bank, Bank of England would monitor and publish details of lending in its quarterly reports.
The four banking majors have also agreed to reduce the bonuses of their senior executives, assuring that the aggregate bonus pool in 2010 would be lower than the previous year.
Further, they would publish the pay of their highest-paid five senior executives below the board level on an annual basis, in addition to the existing requirement of disclosing the pay of board members.
