British banks should think twice before handing out massive bonuses in the New Year, Vince Cable has warned.
Chancellor George Osborne last week confirmed he would impose a tax on banks' balance sheets as part of measures to insure the public finances against the cost of future financial crises and to help bring down a record budget deficit.
Speaking to the CBI, Mr Cable said: "No one listening to the Chancellor's statement last week will be under any doubt of the government's collective determination to ensure that banks act in the interests of the wider economy - and that, in the new year, they must not engage in another self-indulgent bonus round."
The Business Secretary has been one of the most outspoken critics of the banking sector, which needed substantial government support during the credit crisis.
Banks have come under fire since the crisis for continuing to pay out big bonuses despite warnings from ministers that large pay packets were partly to blame for the risk taking that triggered the credit crunch.
Mr Cable added: "For those who say that by crimping the banks' style, by stopping them indulging in short term speculation, that we are somehow damaging their shareholders' interests, I want to know - how did short termism work out for you? A glance at the share price graphs around 2008 suggests, not very well."