G20 split on banning bank bonuses

[cal04]

Source: Agence France-Presse

EUROPEAN finance chiefs have called for an end to the bonus culture among bankers, highlighting a split with the US at G20 talks also debating the winding down of emergency support to the world economy.

Finance ministers from the world's richest countries and top emerging powers are using the two-day meeting in London to lay foundations for a Group of 20 leaders' summit in the US city of Pittsburgh on September 24-25.


(snip)
Arriving at the meeting, France's finance minister Christine Lagarde pledged to launch an "onslaught against bonuses."

She indicated she would ratchet up the pressure on the US and Britain, telling reporters governments should be responsible to voters, not financiers.

Read more: http://www.theaustralian.news.com.au/story/0,25197,26029727-12377,00.html

[Joe Chi Minh]

1. "The bonus culture must come to an end and it must end at the G20 meeting

in Pittsburgh," Ms Lagarde and colleagues from six European countries including Germany wrote in the Financial Times Friday."

"We must be very clear: these practices are not only dangerous, they are improper, cynical and unacceptable."

Could it have been expressed more concisely or pungently? I don't think so.

[tocqueville]

2. still Brown has signed the joint declaration

so the split is more EU-US as usual. Now it's going to be more interesting (than eventual British reluctance) to see how the emerging powers, China etc... are going to side.

[Ghost Dog]

4. G20 calls for 5-year bonus deferrals

Alistair Darling is to call on banks to defer bonuses for five years as the centre piece of sweeping new proposals on City pay.

The Chancellor will make his recommendations at the London meeting of G20 finance ministers in an attempt to strike a global agreement on bonuses. His plans go far further than the Financial Services Authority (FSA), which recommends three-year deferrals, but stop short of endorsing French demands for a bonus cap.

Bonuses have thrust their way to the top of the finance ministers' agenda due to mounting evidence that banks are reverting to old habits with multi-million pound deals.

Alongside pay, the UK and US will urge other nations to accept tougher capital and liquidity requirements to prevent a repeat of past excesses. However, in a sign that discussions will not be easy, French finance minister Christine Lagarde yesterday said minor revisions to the current regime should be sufficient.

Mr Darling will be hoping to bridge the difference in policy on City pay with a range of strict new proposals, including:

- five-year deferrals on a portion of all bonuses

- clawbacks if long-term performance plummets

- larger share-based payments

- a ban on all guaranteed bonuses

- clearer disclosure of sums and individuals who receive big pay-outs

He is expected to argue that caps on either individual bonuses or pay pools are "unenforceable" but he wants to go further than the FSA by demanding the rules be made "mandatory", not mere guidelines. The FSA also stopped short of imposing clawbacks and allows banks to pay one-year guaranteed bonuses to attract staff who are on course to hit their targets at their current employer.

/... http://www.telegraph.co.uk/finance/financetopics/g20-summit/6140249/G20-calls-for-5-year-bonus-deferrals.html

--> Still lots of politicking going on...

[imdjh]

3. They'll simply steal it. nt

[No Elephants]

5. Let private businesses compensate their employees as their shareholders

permit, BUT don't let them get too big to fail, don't let banks take undue risks and DON'T BAIL THEM OUT.