Bankers staying put in spite of salary controls

The Irish government is set to keep a tighter grip on salaries within the six domestic banks covered by the state guarantee. However, this is unlikely to sway staff away from these institutions towards independent firms.

Minister for finance, Brian Lenihan, has set up a committee to ensure "proper controls" over salaries within the six banks covered by the government's €440m guarantee scheme.

These are Anglo Irish Bank, AIB, Bank of Ireland, Irish Life & Permanent, Irish Nationwide Building Society and the Educational Building Society.

This week it emerged that the beleaguered Anglo Irish Bank had paid bonuses to middle management and given salary rises to lower level employees, and now it seems the government wants to have its say on pay.

The committee is due to: "Determine salaries for the banks that are now covered by the State guarantee scheme," Lenihan told RTE.

Speaking about the Anglo bonus payouts, whose top brass are quitting on a near daily basis at the moment, he said: "I am extremely concerned it happened."

You might have thought that salaries set by the government might deter staff from working at the six banks, but considering that just about every financial institution is reviewing its pay strategy and the current dearth of new opportunities, recruiters say employees seem to be staying put.

Helene Bergenstjerna, principal consultant within banking and financial services at recruiters Hudson, says: "I've not seen candidates discriminating between those banks covered by the guarantee and those that are not.

"However, some within professions where there is the possibility of moving to other industries - accountants or corporate finance people with specific industry exposure, for example - some are leaving financial services altogether."