Banks Told to Curb Bonuses After Insurance Provision, FT Says

The Financial Services Authority is pressuring banks to curb their bonus pools to compensate for losses spurred by mis-selling payment-protection insurance to customers, the Financial Times newspaper said.

The regulator wants banks to recognize the multibillion compensation payments for PPI insurance used to cover payments on credit cards and mortgages in case of illness or unemployment, as they assess 2011 payouts for bankers, the newspaper said citing an unidentified person familiar with the talks. The discussions with the FSA come as banks plan to pay out large sums to their employees despite calls to curb bonuses from politicians and lawmakers, the report said.

To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net

To contact the editors responsible for this story: Edward Evans in London at at eevans3@bloomberg.net