Lord Turner, the chairman of the
Financial Services Authority, appeared before the
Parliamentary Committee on Banking Standards last week. A transcript of his evidence has been published: see
here. The Committee's questions were wide-ranging and Lord Turner repeated many of the points he has made before, including his view about the value (or lack thereof) of some activities undertaken by banks. He also said something about the impact of disclosure on directors' remuneration:
If you go back to the mid-1990s and the debates that broke out extensively about top-level remuneration at that stage, particularly in relation to utilities-we had the Greenbury report and so on-it is a reasonable interpretation, in retrospect, that transparency of executive directors’ pay probably drove a further increase in top executive remuneration. It made it easier for remuneration consultants to say, "Look, your chief executive is not being paid in the top quartile. Surely you want a top-quartile chief executive".
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