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ABI responds to Treasury Select Committee Banking Crisis Report

The Treasury Select Committee has released its latest report, The Banking Crisis: reforming corporate governance and pay in the City. Commenting on the report, Peter Montagnon, the ABI's Director of Investment Affairs, who gave evidence to the Committee, said:

"Investors continue to be major sources of capital, already committing tens of billions to new issues of equity this year, so they have an important role. As shareholders, we want to be more effective in our dialogues with companies. We are working on that and will continue to do so through our contribution to the Walker Review.

"It is very important that corporations do not become ‘ownerless' as the report suggests could happen, because if this happens, they will inevitably be subject to higher regulation. What we therefore need to do is to broaden the community of shareholders committed to dialogue, so that the ‘comply-or-explain' principle can be really made to work.

"This is a big challenge, as the banking crisis has shown, but we must rise to it. That said, we also have to acknowledge that shareholders could not have prevented the crisis on their own nor are the shortcomings of corporate governance the major cause. Everybody has to pull together to build a system that works better.

"We welcome the Select Committee endorsement of our idea that remuneration consultancies should be subject to a Code of Ethics. This would be very helpful, and would be part of a framework that does not impose remuneration constraints on banks and financial companies which would make them difficult to manage and less competitive internationally."

Last updated 01/07/2016