After the fallout over bonuses at American insurer AIG, top executives at France's Société Générale, which has received state loans worth 1.7 billion euros (2.3 billion dollars), have renounced potentially lucrative stock option packages.

FRANCE 24 interviewed Philippe D'Arvisenet, director of economic research at BNP Paribas, another French bank, what he thought of the move.

FRANCE 24 - As an economist, how do you react to the controversy on stock options?

Philippe D'Arvisenet - Morally, I think this debate should take place. But from a strictly economic point of view, it is a non-issue because in the short term this is not going to change anything. We are in a recession much deeper than many believe, with a far-from-negligible risk of deflation.

We need first to implement globally coordinated plans far more ambitious than those already in place. On the other hand, the financial system has not yet returned to normal operation. It is therefore appropriate to continue the consolidation of balance sheets in the banking and financial sector.

Do you think that giving up stock options is necessary for the French and world economies, or is it a political measure to appease public opinion?

Personally, I think that this affair is above all political. Governments need to do better to have public opinion accept the support given to the financial sector. Even if stock options cost nothing to the state, public opinion thinks it's the taxpayer who pays.

We should also remember that stock options can only be exercised several years after they are handed out. They are instruments designed to motivate executives.

But we've also seen in the past the risks inherent in this type of compensation – the impulse to boost the share price can encourage excessive risk-taking. It is this kind of tendency that should be avoided.

Are you in favour of supervising salaries for big bosses in France as has been suggested in the United States? And what would be the consequences of such a measure on companies?

I’ve observed that in recent decades there has been a spurt in markets leading to an increased wage gap between executives and ordinary employees. This difference reinforces, in my view, the feeling of injustice among people, especially in times of crisis. So it’s not surprising that governments are trying to regulate or, better still, coordinate internationally their approach to the issue.

Furthermore, when a government has significant shareholdings in a company or a bank, or provides aid, it can naturally have an influence on the company's remuneration policy.