Chillin' out till it needs to be funded
While Credit Suisse and Morgan Stanley lead many others in cutting bnase pay at nearly 30% RBS and Spanish regulators joined in the debate over big bonises. RBS is planning to set up a team to look at options doing away with CEO Hester and others’ bonuses with upto a predefined limit in long term incentive plans and salaries to avoid run ins with the government next time. RBS is thus going to promise greater transparency and items like the 6 m sharesin bonus for Stephen Hester would not be tabled by the government owned bank for time to come
Spanish regulators simply capped the pay for Directors and senior Executives at banks , in some cases by 75% . The pay limits would apply to all banks in which the State has an ownership interest after the bailout. The ongoing Greek negotiations have apparently occasioned more bailouts at Spanish banks after upto 80% cuts were pushed on to investors.
The Spanish government earlier asked banks to provide up to Eur 50 mln to Capital to compensate for bad property loans. As a compromise, the government could ask the banks for more bank consolidation ( merging onother trouble dbank to the new Cajas combine) as part of bank reform for a one off cleansing. a EUR 8bln Frob fund ( Fund for Orderly bank restructuring) would lend the needy banks at a 8% interest
Santander and Caixa have already provided extraordinary reserves while BFA Bania is in process of doing so
Bankia could be forced into a merger with Caixa or Santander soon. It was formed out of Caja Madrid and six other local savings banks
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