A round-up of the main news stories from this week.
Bank of England Governors Debate Negative Interest Rates
The two deputy governors of the Bank of England have been debating the merits of setting interest rates below zero to promote economic growth. Paul Tucker told the Treasury Select Committee on Tuesday that the UK could set rates below zero, which would encourage banks to lend rather than storing deposits at the central Bank. Fellow deputy Charlie Bean said that potential legal issues made it a challenging proposal to implement. There are also concerns that rates below zero will further negatively impact savers, who have already seen returns on savings accounts flounder this year.
HSBC Becomes Latest Bank to Ditch Sales Targets
HSBC has become the latest big bank to ditch sales bonuses in favour of customer service. From January, staff were no longer offered commission on the product sales. Instead, the bank now follows Barclays and the Co-operative Bank in rewarding staff based on customer service. City regulator the Financial Services Authority said last year that commission-based pay structures had encouraged employees to mis-sell products, such as packaged accounts and PPI insurance.
RBS Announces £5.2 billion Loss in ‘Chastening’ Year
Royal Bank of Scotland has announced a £5.2 billion pre-tax loss for 2012. The bank described the performance as ‘chastening’. Despite a rise in annual operating profits, the bank has suffered from a string of penalties from scandals including Libor and the mis-selling of PPI insurance and interest-rate swaps to small businesses. Despite the losses, chief executive Stephen Hester said that re-privatisation of the bank was almost within reach.
Barclays to Reveal New Pay Details
Barclays is to announce in its annual report next week how much its highest and lowest paid staff take home. In what is thought to be the most detailed disclosure of banks’ staffing expenses to date, Barclays is expected to reveal 600 of its staff take home over £1 million a year. The bank is also expected to reveal how much in past bonuses it has successfully recouped from staff implicated in major scandals.
For the latest news and product updates, remember to visit us at Which4U.co.uk.