The Government must show commitment to tackling risky behaviour at banks, says FairPensions.

In a written submission to the government consultation on "Bank Executive Remuneration Disclosure" FairPensions has called for the government to show a serious long term commitment to ending excessive risk-taking at banks.

FairPensions criticised the government for including clauses in the policy which mean it must be reviewed after five years to assess whether its objectives can be achieved with ‘less regulation'. Christine Berry, Policy Officer at FairPensions, said:

"These provisions send the wrong message, suggesting that moves towards greater transparency stem from a desire to appease public sentiment rather than a genuine commitment to reducing systemic risk in the long-term. If the government genuinely believes that these regulations are vital for long term financial stability, it should not subject them to removal once public cries for retribution have died down.

"Applying the government's deregulatory policy to financial services is a fundamental mistake which suggests that the lessons of the crisis have not been learned. When it comes to systemic financial risk, the biggest danger is not too much regulation but too little."

In their response to the consultation FairPensions also:

• Welcomed government proposals for greater transparency; 
• Called for performance targets, as well as pay levels, to be disclosed so as to allow scrutiny over the incentivising of risk taking; 
• Highlighted the disconnect between the objective of tackling systemic risk and the priorities of the shareholders at whom disclosures are aimed, which tend to be focussed on individual firm performance. 

FairPensions has also called on The Treasury to work with the Kay Review and the Financial Reporting Council to ensure shareholders take a broad approach to their fiduciary responsibilities which encompasses systemic risks posed by the firms they own.