Review attacks City 'short-termism'
A government-commissioned review to be published today will hit out at the culture of “short-termism” in the City.
Review author John Kay has this morning said he was "puzzled" about why bankers continue to claim they need bonuses, saying they have "undesirable consequences".
Mr Kay's report argues for scrapping rules that require companies to report earnings quarterly, giving a stronger voice to shareholders on company boards and bringing in a requirement to consider long-term interests before approving takeovers.
Shadow Business Secretary Chuka Umunna "warmly" welcomed the review, and said Labour would examine the proposals in detail.
"Professor John Kay is right to draw attention to a financial services sector which has too often served financial intermediaries rather than the needs of the real economy. This is precisely the point which Ed Miliband made earlier this month when he called for a return to stewardship banking," he said.
"One of the best ways of encouraging long-termism is by providing business with policy certainty. But, as British Chambers of Commerce Director General John Longworth has pointed out, Government U-turns and indecision have created a difficult climate and huge uncertainty for firms looking to invest."
It comes as a report found British companies paid a record £22.6bn in dividends in the second quarter of 2012.