Bank executives’ pay packages are the latest issue to come under scrutiny in wake of the global financial crisis.
Kevin Rudd announced plans yesterday to link executives’ salaries with banks’ capital adequacy requirements to discourage high-risk behaviour that helped trigger the crisis.
Banks have reportedly rejected the idea. Australian Bankers Association chief executive David Bell said “there is no evidence that Australian bank salaries packages have weakened our banks,” The Australian reported.
Mr Rudd’s announcement comes as international governments make similar crack downs on bank salaries and bonuses.
British Prime Minister Gordon Brown has told British banks the Financial Services Authority will draft a code on executive bank pay.
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