FRENCH PRESIDENT Nicolas Sarkozy announced new limits on bonus payments to bank traders yesterday and said he would press partners in the Group of 20 nations to adopt the same standards as Paris.
Amid concern over bank bonus payments that have been creeping back to levels seen before last year’s financial market meltdown, Mr Sarkozy called in the heads of France’s biggest banks to announce tougher controls. “I was scandalised to see the lessons of the crisis being forgotten so quickly by some people at a time when the page has not even been turned on the crisis,” he said after the meeting at the Élysée Palace.
Outrage over bonuses in France has been stoked by concern that banks have been tight-fisted in lending to small firms, despite the massive injections of public support made available to the financial sector. Mr Sarkozy said banks would be required to defer two-thirds of bonuses paid to traders over three years, and to make a third of the payout in bank stock.
If an operation on which a bonus was paid lost money within two years, the deferred part of the bonus would not be paid out.
He said compliance would be closely monitored, and banks that did not follow suit would be shut out of lucrative mandates for state activities. “We will not work with banks that do not apply these rules,” he said. – (Reuters)
