Hector Sants, the chief executive of the Financial Services Authority (FSA) will waive his bonus, amid criticism of the regulator's role in the crisis, reports The Telegraph.
However, bonuses will still be paid to the financial watchdog's other staff.
The news comes in the wake of fury about the high remuneration for bankers in spite of the losses incurred by their shareholders. Lloyds has defended plans to reward retail and commercial staff with bonuses, worth a reported £120m, when its HBOS arm is set to record a loss of more than £10bn, raising concerns it may need more state help.
"We are going to be paying bonuses," Lord Turner, chairman of the regulator, said in a BBC interview. "Hector Sants told me on Friday that he personally does not want to take a bonus." Lord Turner added that keeping the FSA's pay structure was essential to attracting talent that would help rebuild the banking system.
LLOYDS BANKING GROUP has dismissed as "tosh" speculation that it will be nationalised following last week's shock revelation that its merger with HBOS cost it almost £11bn of losses, The Telegraph reports.
It came as investors braced themselves for another volatile day's trading on Monday amid growing fears the bank will have to take a further capital injection from the state.
Senior banking sources say that the rate and scale of the write-downs suggest the bank will need to raise £5bn to £10bn more in capital.
It was also suggested it might seek to save almost £500m a year in dividend payments to the Government by getting them to convert their preference shares into ordinary shares, leaving taxpayers with more than 50pc of the company.
THE GOVERNMENT yesterday publicly hardened its position on bank executive bonuses saying it will be "very, very robust" in clamping down on bonuses for 2008 in banks in which it holds shares, The Guardian reports.
It will only allow modest payments for clerks earning around £20,000 a year.
It came as David Cameron said he would cap all 2008 bonuses at £2,000 for staff in banks owned or partly owned by the government. He also said the government should be willing to sue any bank executive who insisted their contract entitled them to a large bonus for the year.
The government shift, after intense private disagreements within the cabinet, came amidst reports that Lloyds plans to pay out up to £120m in bonuses for 2008 to thousands of staff. Its chief executive, Eric Daniels, came under intense pressure after Friday's shock profits warning caused by the HBOS banking group it rescued four weeks ago. The bank insisted that bonuses were typically £1,000 or less.
POLITICIANS MAY HAVE become too fascinated by the apparent expertise of financiers and bankers, the head of the financial watchdog said yesterday, reports The Times.
While accepting the shortcomings of the Financial Services Authority in failing to anticipate the credit crunch, Lord Turner of Ecchinswell allowed himself to be drawn on the question of whether ministers, including Gordon Brown, had got too close to the banks.
Mr Brown is reputed to have helped to broker the controversial Lloyds-HBOS merger in a chat with Sir Victor Blank, then Lloyds TSB chairman.
Interviewed on The Andrew Marr Show on BBC One, Lord Turner said: "Over the last ten years there probably was too much of a fascination with what you could call finance capitalism, and a failure to realise the risk that was emerging. Perhaps at the end of it there will be less fascination."
The chairman doggedly tries to be amusing
'Profitability is almost a myth'
Active Wealth in liquidation
Cautious welcome for volatility
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