HSBC chief criticises 'guaranteed bonus' culture
HSBC’s chief executive has railed against the return of guaranteed bonuses in an impassioned call for the banking industry to avoid returning to boom-time behaviour and to learn the lessons of the financial crisis.
Speaking at the Euromoney award dinner last night, HSBC chief executive Michael Geoghegan said banks should think carefully before offering staff guaranteed bonuses, which he warned could “disrupt” the industry.
Geoghegan said banks needed to ensure staff were offered long-term incentives to perform as he offered a wider critique of the banking industry, which he said was in danger of forgetting some fundamental lessons.
He said: “We run on a philosophy that banking is a very boring business. We take deposits and lend second – that is the fundamental of our industry and it has often been forgotten. Before we reopen the securitisation markets let’s get back to that principle.”
Speaking last month, HSBC chairman Stephen Green offered a similar view on the financial industry as he urged banks to get back to the basics and said that stories of “eyecatching golden hellos” made his heart sink.
Geoghegan’s speech to an audience of more than 300 senior financiers, including Deutsche Bank chief executive Josef Ackerman and Credit Suisse investment banking head Paul Calello, picked up on this theme as he said banks must do more to rebuild public trust.
Ackerman speaking earlier called for more engagement by banks with regulators and central banks, warning that if the industry did not it would miss a chance to influence the shape of future regulation.
-- Write to Harry Wilson at hwilson@efinancialnews.com
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