Main focus of Monday, September 7, 2009

No upper limit to bonuses

In their meeting in London on the weekend the finance ministers of the most important industrial countries and emerging markets agreed on introducing stricter regulations for managerial bonuses, although no upper limit will be set. Details will be worked out at the G20 summit in Pittsburgh at the end of September.

Sega - Bulgaria

The daily Sega comments on the failure of the German-French initiative to limit bankers' bonuses: "Top-ranking politicians of the two largest European economies couldn't even get their European partners to agree on the regulation package, which is actually meant for the entire G20. ... According to John Lipsky, number two at the IMF and the real ideologue behind the restrictions, they would hardly have any effect at all if they were only adopted by France and Germany, or even by the entire EU. For him the only way to tame the beasts of prey of global finance is to set a global limit on the absurdly high bonuses for top bankers. Otherwise banks ... would find ways to elude the upper limits. What is banned in France would be paid out by their subsidiaries in India and Indonesia." (07/09/2009)

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More from the press review on the subject » EU Policy, » Fiscal Policy, » Europe
All available articles from » Emil Harsev

De Tijd - Belgium

The G20 is a "unique platform for carrying out badly needed reforms in the world of finance", writes the business paper De Tijd. Nevertheless it has proved unable to agree on capping bankers' bonuses: "The financial crisis of the last year has shown how fragile the financial system is. But it now seems that the urgency is evaporating with the crisis. That is unfortunate. The supervisors at the Financial Stability Board must now work out a compromise text, which promises to be no easy task. All of its members agree something must be done about the bonus culture and the capital demands on banks. But that doesn't mean everyone has the same solution in mind. The world's leading politicians have just three weeks to reach an agreement and give financial market reform a conclusive form. Doubts are growing over whether they will succeed." (07/09/2009)

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More from the press review on the subject » Fiscal Policy, » Global
All available articles from » Jean Vanempten

The Times - United Kingdom

The conservative daily The Times welcomes the decision of the G20 finance ministers not to put a limit on bonuses: "The summit resisted pressure from the governments of France and Germany to impose a cap on bankers' pay. That proposal has powerful populist appeal and minimal economic logic. Governments can reduce income inequalities through the tax system, if that is what voters want. But they have no insight into what a particular job in the marketplace is worth and whether it is 'socially useful'. It makes sense for banks to tie employees' pay to risk-adjusted measures of profitability, and to be able to claw back bonuses from traders who take risks that turn sour. ... But statutory caps on bankers' pay give a message that only underachievers need apply. The G20 has so far maintained the right balance." (07/09/2009)

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More from the press review on the subject » Banks, » Global

Sydsvenskan - Sweden

Beyond the discussion about bankers' bonuses, Sweden's environmental minister Andreas Carlgren laments in the daily Sydsvenska Dagbladet that the G20 meeting in London failed to produce any progress on climate financing, but voices hope for the summit in Pittsburgh: "We have waited long enough for the US. … Judging by his speech yesterday [Finance Minister] Anders Borg is full of hope that the Americans will move ahead. 'With the new government they now have the will to move ahead'. That should be enough. Just take a look at the meeting in London: the G20 countries surprisingly managed to take a major step forwards regarding bankers' bonuses. If there's a similar breakthrough on climate issues in Pittsburgh it will bode well for the climate conference in Copenhagen [in December]. Really? Well many things are possible when the political will is strong enough." (07/09/2009)

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More from the press review on the subject » International Relations, » Environmental Policy, » Global

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