British banks should be forced to clamp down on pay and to scrap controversial practices such as “golden hellos”, according to the head of Société Générale, France’s second-biggest bank.

Frédéric Oudéa, chairman and chief executive of SocGen, said that it was not in the long-term interests of shareholders for banks to return to huge incentive payments, including “guaranteed” bonuses, for executives.

“French banks have formed a contract with the Government and the regulator that they will not pay guaranteed bonuses for more than one year. It would be very good for the whole banking system to generalise this kind of commitment,” Mr Oudéa said. “It is important to put in place structures which make people accountable for the risk they take.”

SocGen hit the headlines in 2008 when Jérôme Kerviel, one of its staff, was at the heart of a £3 billion-plus rogue trading scandal, but the bank has covered the cost and is one of a handful of lenders to have escaped the worst of the financial crisis.

The bank is expanding its investment banking business and has been recruiting significant numbers in London. Mr Oudéa, 46, said that SocGen — second in France to BNP Paribas — was able to attract candidates in London but suggested that the recent trend of taking the brakes off bonuses might make it more difficult.

His comments chime with other warnings that huge bonuses are creeping back into investment banks, despite almost all having been propped up with taxpayers’ money.

Lord Turner of Ecchinswell, chairman of the Financial Services Authority (FSA), told the Commons Treasury Select Committee recently that the City was in danger of reverting to the worst excesses of the recent past behind a “business as usual” attitude. He raised concerns about “aggressive hiring” by the trading operations.

Mr Oudéa, who has held the joint role of chief executive and chairman at SocGen since May, also warned of the dangers of making large international banks safer by forcing them to restructure into subsidiaries for each jurisdiction they operate in.

Such a move has been floated by the FSA and the Treasury and is likely to form part of the Treasury’s paper on financial regulation reform, which is due on Wednesday.

He made clear that French banks were likely to put pressure on the European Commission to be tough in assessing potential distortions to the market from the state-controlled UK banks. “It is a question of fairness of competition,” he said.

Neelie Kroes, the Competition Commissioner, told the British Bankers’ Association conference last week that the “massive aid” to Lloyds Banking Group and the Royal Bank of Scotland was hurting competition.

“The likelihood of significant divestments by RBS and Lloyds is strong," she said.

Golden hellos

Credit Suisse paid “golden hellos” of almost £25 million to poach executives last year Peter Kraus had been paid $25 million for three months work at Merrill Lynch when he got a $52 million “hello” at AllianceBernstein

Citigroup gave $38 million in stock to Vikram Pandit, its new chief executive, last year

The gold standard in “golden hellos” remains the $110 million deal awarded in 2004 by Sirius Satellite Radio to Howard Stern, the radio presenter, in the hope that he would help to make subscription radio profitable. It has not

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