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

Sweden Recognizes Palestinian State; Israel Upset
2014 10 31
Sweden on Thursday became the biggest Western European country to recognize a Palestinian state, prompting a strong protest from Israel, which swiftly withdrew its ambassador from Stockholm. The move by Sweden’s new left-leaning government reflects growing international impatience with Israel’s nearly half-century control of the West Bank, east Jerusalem and its blockade of the Gaza Strip. It also comes during increased ...
Fed-Backed Study: How to Brainwash Public into Fearing “Climate Change” Like Ebola
2014 10 31
$84K study seeks ways to make public fear "climate change and overpopulation" The National Science Foundation is funding a study to determine how to brainwash the public into fearing “climate change and overpopulation” as if they were Ebola. The NSF awarded an $84,000 grant to researchers at the State University of New York at Buffalo yesterday to figure out how to make ...
Brain decoder can eavesdrop on your inner voice
2014 10 31
As you read this, your neurons are firing – that brain activity can now be decoded to reveal the silent words in your head TALKING to yourself used to be a strictly private pastime. That’s no longer the case – researchers have eavesdropped on our internal monologue for the first time. The achievement is a step towards helping people who cannot ...
6 Million Lies
2014 10 30
“If you do not specify and confront real issues, what you say will surely obscure them. If you do not alarm anyone morally, you yourself remain morally asleep. If you do not embody controversy, what you say will be an acceptance of the drift of the coming hell.” C Wright Mills. I need to share information I have discovered ...
Google’s New Computer With Human-Like Learning Abilities Will Program Itself
2014 10 30
In college, it wasn’t rare to hear a verbal battle regarding artificial intelligence erupt between my friends studying neuroscience and my friends studying computer science. One rather outrageous fellow would mention the possibility of a computer takeover, and off they went. The neuroscience-savvy would awe at the potential of such hybrid technology as the CS majors argued we have nothing to ...
More News »