Bankers can breathe easy. This year’s bonus season will roll on unhindered by any new disclosure rules.
George Osborne will take credit in the City for the U-turn. But the bankers also have to thank Sir David Walker, the City grandee who originally proposed the measures, for concluding it would be “mistaken” for Britain to go it alone.
Walker’s revised view is largely consistent with his report, which did acknowledge the dangers of unilateral action. But Walker also made one conflicting point. This is the key passage:
The priority of persistence with efforts to achieve such [international] convergence needs no further underlining, but a situation may develop in which the adoption of an exemplary leadership stance by the UK in this respect is the most effective way of achieving progress.
Exemplary leadership? The virtues of going it alone? This bold manoeuvre is not something Walker cared to mention in his recent op-ed for the Financial Times.
It is probably not an idea that will capture Osborne’s imagination. In theory the chancellor still thinks the tougher disclosure rules are worthwhile. And Treasury officials say they are still witholding the right to act alone, if their push for co-ordinated action in Europe proves unsuccessful.
But given the amount of political heat Osborne is taking over failing to impose these rules, you have to wonder whether he really does believe in the reforms. After all, he could have merely pointed to advice from Walker saying that in some situations, unilateral action is the “most effective way of achieving progress”.