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Walker wants UK not to go ahead with pay band disclosure for bankers

Proposal could put George Osborne and Vince Cable at loggerheads

Former director of the Bank of England Sir David Walker has argued that Britain should postpone a more transparent bonus regime for bankers until next year, on the grounds that no other country was planning similar changes.

The Treasury is also reportedly against the policy of publishing high-end bank pay and bonuses above £1m in bands in the absence of an international agreement on increasing pay transparency.

However, this could put chancellor George Osborne and Business Secretary Vince Cable at loggerheads as the latter has always been in favour of increased transparency on bank pay - giving shareholders full sight of remuneration policy.

The Treasury, on its part though, reiterated its commitment to disclosure and improving confidence in the financial services system, saying that "the Chancellor will continue to discuss this issue with his international partners."

In an article in the Financial Times, Sir David has pointed out that going ahead with the pay band disclosure policy will place London at a big disadvantage to rival financial centres.

"Any attempt to require banded disclosure for UK banks in isolation would be commercially sensitive vis à vis their non-disclosing competitors. It could also stimulate higher executive turnover, and ... lead to higher remuneration as a defensive retention measure," Sir David argues.

"For these reasons it would be mistaken for the British Government to act in the absence of closely aligned similar initiatives elsewhere in Europe and, above all, in the US," the author of the policy piece opined.