FT Update

Wed 3 Mar 2010

HSBC and shareholders set for cash over pay

HSBC have vowed to continue fighting for pay rises for top executives that have been blocked by investors which could lead to a clash with leading shareholders.

Three of HSBC’s top executives last year earned more than £9m each, Stephen Green, chairman, said that the board believed chief executive Michael Geoghegan was underpaid. He was “committed” to putting this right within a year.

FSA eyes higher fines

The new penalties policy recently adopted by the Financial Services Authority has been estimated that fines could triple. These new rules will come into effect on March 6 and set a minimum fine of £100,000 in serious cases of market abuse.

Critics have stated that the FSA has underestimated the impact of this and that large banks could end up paying far more in fines than enforcers expect.

Goldman stands out

A filing with the Securities and Exchange Commission yesterday revealed that Goldman Sachs made at least $100m in net trading revenues on 131 days last year. In 2009 Goldman earned a record $13.4bn as net revenues more than doubled and the bank reined in compensation costs. The bank lost money 19 times in last year’s 263 trading days. Its daily losses never exceeded $100m.

FSA plays down prop trading impact

During the financial crisis, proprietary trading only accounted for 13 percent of the total lost by banks in London. More than 70 percent of UK losses came from structured credit, according to the director of the prudential division at the Financial Services Authority.
The FSA data comes from its study of crisis losses by banks in London, including the UK businesses of over seas institutions.

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