by Mathew Katz

As the European Union considers new regulations and fines meant to curb bonuses for excessive risk-taking, the U.K. government has its own strategy.

Prime Minister Gordon Brown said today that his government plans to force banks to hold back half of all bonuses for senior traders and executives for up to five years. He also said the Financial Services Authority, which regulates banks, is working on plans that would allow it to force banks to hold more capital if the FSA is unhappy with its bonus structure.

 

Both the British and European Union plans would provide firm restrictions on bank bonuses and that's left some lawmakers asking when the U.S. will adopt similar measures. The government banned cash bonuses for the top 25 employees at companies that took taxpayer funds last year, but now that many of those institutions have paid back TARP funding those restrictions no longer apply. The Treasury Department says it has plans to revolve executive compensation, but all we have right now is a set of broad-based principles.