The Financial Services Authority (FSA) is pushing banks to cut their bonus pools to reflect the heavy losses incurred through the mis-selling of Payment Protection Insurance (PPI), according to the Financial Times.

The paper reported that the regulator is demanding banks take into account the multibillion-pound refund bill for PPI mis-selling when they calculate pay-outs for 2011. It said the FSA had been having robust conversations with the banks and had been pushing them hard to recognise PPI in their bonuses.

Pay discussions between the FSA and the big banks are set to continue over the coming weeks. The FSA told the FT it was ‘vigorously engaging’ with the banks to ensure they were not paying out large bonuses if they had not yet met tough new capital requirements.

The FSA does not have power to intervene on bonuses but reportedly believes that as bank shareholders bore the brunt of the charges through write downs made in the first half of 2011, so too should bank staff.

Sally Bowyer, Managing Director of Brunel Franklin, stressed that vendors had a responsibility to ensure their products were appropriate for individual customers before completing the transaction. “Unfortunately, the mis-sale of PPI policies is by no means unusual. Customers may well wish to protect their loan repayments, but all too often they have been sold products that were completely unsuitable for their needs.”

Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51