EU ministers pledge to end banker bonus party
2009 09 02

By Anna Willard | reuters.com

European finance ministers pledged on Wednesday to clamp down on banker bonuses, raising the prospect of spreading such payouts over years or demanding back money if business turns sour.

Last week, French President Nicolas Sarkozy unveiled rules for his country's bankers and said he would propose caps and taxes on bonuses at a meeting of the Group of 20 industrialised and emerging nations in Pittsburgh starting on Sept 24.

"The bankers are partying like it's 1999, and it's 2009," Swedish Finance Minister Anders Borg, whose country holds the European Union presidency, told reporters before a meeting of finance ministers from the 16 countries that use the euro.

"The bonus culture must come to an end and it must come to an end in Pittsburgh."

Sarkozy's clampdown in France was in part prompted by BNP Paribas' decision to set aside 1 billion euros ($1.4 billion) for bonuses having received five times that sum in state aid.

His tough line has won widespread support, with an echo of approval in Germany, whose public is deeply sceptical of the Anglo-Saxon bonus culture and whose chancellor, Angela Merkel, is fighting a campaign for re-election this month.

Jean-Claude Juncker, chairman of the Eurogroup of euro zone finance ministers, also gave France a thumbs-up.

"We have to make the rules tougher," German Deputy Finance Minister Joerg Asmussen told reporters after the ministers' lunch meeting.

"The EU wants a clear link between bonus and performance -- not just bonus but also clawback -- and also that these payments are made over years after the banks' risk position is clear."

The German government has come under fire after it was forced to bail out lenders such as Commerzbank and a host of smaller lenders shot off the rails.

Critics want to curtail a system of bonuses -- typically paid around March after the previous year's business result is worked out -- that incentivised bankers to take big risks for quick gains.

But they are treading carefully, fearing that should European rules be tougher than in the rest of the world, it could suffocate the region's banking industry.

"There are substantial concerns that the U.S. will not support restrictions on bonuses," said Ireland's Finance Minister Brian Lenihan.

French Blueprint
So far, only Sarkozy has outlined how exactly he intends to keep a lid on bonuses.

He is insisting that bonuses be paid over three years, with half of it, or up to two-thirds for bumper bonuses, deferred over the last two years of this period. A star trader, for example, whose investments subsequently slip into the red would lose his bonus. [nLP286769]

French banks which refuse to sign up to the new rules will be bumped off the list for government business such as privatisation.

Sarkozy also hopes to persuade the G20 group of nations to limit and tax bonuses but said this would not apply in France unless others agreed to the proposals.

Britain's finance minister Alistair Darling did not attend the meeting, while London -- home to Europe's biggest financial centre -- remained quiet on the issue.

British Prime Minister Gordon Brown told the Financial Times on Tuesday that he wanted tough action on excessive remuneration, but that he was unenthusiastic about French-led pressure to set a mandatory cap.

Source: reuters.com



Related Articles
Expense Allowance Abuse by MEPs (Video)
The Council of the European Union goes for the All Seeing Eye Logo
The Dark Roots of the EU
EU leaders sign The Lisbon Treaty (The New EU Constitution)
A symbol of the building of the modern world
Former Soviet Dissident Warns Of EU Socialist Dictatorship
New EU foreign policy think tank created - European Council on Foreign Relations (ECFR)
Red Ice Radio - Anthony & Dave from Wise Up Journal and We Are Change Ireland - EU Treaty
End of Nations - EU Takeover & the Lisbon Treaty (Video)
The eugenic-inspired militarization of the EU is a threat to aspirations for world peace
Masonic Influence in the EU
Lords usher in EU treaty with 12-hour farce
Barroso: European Union is 'Empire' (Video)
Franco Frattini wants EU high tech security shake-up
EU gives green light for cloned food to go on sale in UK shops
EU Constitution author says referendums can be ignored
Britain ratifies EU treaty - The Queen signs goatskin “instruments of ratification"
EU “Democracy” Unveiled
EU, Dependent on Russian Energy, Balks at Georgia War Sanctions
Operation Sarkozy
Nigel Farage on the New Euro-Nationalists (Video)
Lisbon treaty storms through Swedish parliament
Obama and EU to reinvent global politics, pundit says (Steps Towards a New World Order)
EU spends £2.3bn a year on Pro-Brussels propaganda
EU flag and anthem revived by MEPs
Referendum Revolt over the Treaty of Lisbon in European Parliament (Video)
Traditional lightbulbs banned by EU
Kosovo Serbs protest against EU police and justice mission: EULEX
CIA ‘backed’ Irish battle against Brussels treaty
Lisbon Treaty allows for Death Penalty across EU - The "'Summer of Rage" could be Lethal


Latest News from our Front Page

6,000-Year-Old Temple with Possible Sacrificial Altars Discovered
2014 10 21
A 6,000-year-old temple holding humanlike figurines and sacrificed animal remains has been discovered within a massive prehistoric settlement in Ukraine. Built before writing was invented, the temple is about 60 by 20 meters (197 by 66 feet) in size. It was a "two-story building made of wood and clay surrounded by a galleried courtyard," the upper floor divided into five ...
What happened to Journalist Serena Shim? Assassinated? Find out what happened to Serena, Press TV director calls on Turkey
2014 10 21
Press TV news director Hamid Reza Emadi says the “suspicious death,” of the news channel’s correspondent in Turkey is a tragedy for “anyone who wants to get the truth.” Emadi made the remarks in an interview with Press TV on Sunday following Serena Shim’s death across the border from Syria’s Kurdish city of Kobani, where the ISIL terrorists and Kurdish fighters ...
Ancient Roman Nanotechnology Inspires Next-Generation Holograms for Information Storage
2014 10 21
The Lycurgus Cup, as it is known due to its depiction of a scene involving King Lycurgus of Thrace, is a 1,600-year-old jade green Roman chalice that changes colour depending on the direction of the light upon it. It baffled scientists ever since the glass chalice was acquired by the British Museum in the 1950s, as they could not work ...
Rapid Geomagnetic Reversal Possibility: Confirmed
2014 10 21
From the video: "The scientists who conducted the study are still unsure why the magnetic field is weakening, but one likely reason is the Earth’s magnetic poles are getting ready to flip, said Rune Floberghagen, the ESA’s Swarm mission manager. In fact, the data suggest magnetic north is moving toward Siberia." Tune into Red Ice Radio: Ben Davidson - Suspicious0bservers: Space Weather ...
Georgia Guide Stone 2014 cube stone removal
2014 10 21
From: Youtube: Was it all just a gag? it seems the cube stone just happens to be made out of the same Elberton granite that the rest of this morbid monument is made from.
More News »