HSBC's Green says pay contributed to crisis

Stephen Green, the chairman of one of the world's largest banking groups, HSBC, has admitted the financial world's "greedy and short-termist" pay and bonuses had contributed to the crisis and warned that "the public standing of bankers is now at one of its lowest levels for decades".

"The perception that some have taken pay and bonuses in vast multiples of the remuneration of ordinary hard-working and socially valuable people - for indulging in an alchemy which has blown up in their faces and required huge bailouts at prodigious cost to the taxpayer - has ignited fury around the world," Mr Green added. Institutions such as his had found themselves at the "epicentre of a storm of rage".

Mr Green's views echoed those of the Financial Services Secretary Lord Myners, who told the same British Bankers' Association conference: "The onus is now on remuneration committees to be explicit as to why senior executives are being paid as they are... Boards and independent directors are there to exercise judgement."

Lord Myners said that the Government would publish its White Paper on banking regulation next week, but gave little away: "Given the significance of the changes in global financial markets, we will need to look at giving both the FSA and the Bank of England additional responsibilities and powers."Lord Turner, the chairman of the Financial Services Authority, said that he echoed concerns in the Bank about a possible "underlap" between the two principal regulators' activities.

The EU's Competition Commissioner Neelie Kroes said that the part-nationalised Royal Bank of Scotland and Lloyds banking Group faced dismemberment to comply with European competition rules. "The massive aid received by banks such as Lloyds and RBS allows these banks to remain leaders in markets which are concentrated… The need for competitive market structures is stronger than ever; the likelihood of significant divestments by RBS and Lloyds is strong," she said.

In a sharp rebuke to the authorities, Mr Green said that the Bank of England's belief that banks ought not grow "too big to fail" and that they might have their retail and other activities separated was a "fantasy". The BBA's chief executive Angela Knight said that stronger regulation would leave British banks at a disadvantage. "Big economies need big banks... Should the UK decide to artificially constrain in this area, then amongst the most obvious consequences would be an immediate reduction in the internationality and competitiveness of the UK," Ms Knight said.