Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Gaza: A Truce At All Costs?

Read more

AFRICA NEWS

Central African Republic: Brazzaville ceasefire talks deliver fragile deal

Read more

FOCUS

Sluggish tourist season in Crimea

Read more

ENCORE!

Bartabas : Mixing Christ with Spanish music and dancing horses

Read more

IN THE PAPERS

Shifts in the propaganda war waged between Israelis and Palestinians

Read more

IN THE PAPERS

French MPs face quandary in pro-Palestinian rallies

Read more

THE INTERVIEW

Yezid Sayigh, Senior Associate at the Carnegie Middle East Center in Beirut

Read more

#TECH 24

Mind the Gender Gap : getting more women into the tech sector

Read more

INSIDE THE AMERICAS

Bolivian children: heading to work aged 10

Read more

  • France sending military unit to located Algerian plane crash site

    Read more

  • France says missing Algerian plane 'probably crashed'

    Read more

  • Deadly strike on UN shelter in Gaza Strip

    Read more

  • Pope meets with Sudanese Christian woman sentenced to death for apostasy

    Read more

  • Algerian jet vanishes: 'We should eliminate the missile hypothesis'

    Read more

  • Italy’s Nibali cruises to easy victory in 18th stage of Tour de France

    Read more

  • Iraqi parliament elects moderate Kurd as president

    Read more

  • US, European aviation agencies lift travel restrictions to Tel Aviv

    Read more

  • No end to fighting until Israel ends Gaza blockade, Hamas says

    Read more

  • Two foreign women shot dead in western Afghanistan

    Read more

  • At least 60 killed in attack on prison convoy near Baghdad

    Read more

  • Cycling is ‘winning the war on doping,’ says expert

    Read more

  • Ceasefire agreed for Central African Republic

    Read more

  • Can Jew-kissing-Arab selfie give peace a viral chance?

    Read more

  • Botched Arizona execution takes nearly two hours

    Read more

Business

Ministers vow to tackle bank pay but fail to agree on bonus limits

Video by Catherine NICHOLSON

Text by NEWS WIRES

Latest update : 2009-09-06

G20 finance ministers meeting in London have vowed to pursue existing stimulus policies until the end of the economic crisis. They also pledged to incite bankers to adopt "responsible" pay practices but didn't agree on specific bonus limits.

Reuters - G20 finance leaders on Saturday agreed to coordinate a removal of emergency economic packages when recovery takes firm hold but they struggled on the detail of measures to rein in bank pay and lending rules at the root of the recent crisis.

 

With the global economy looking brighter than it had in April when Group of 20 finance ministers and central bankers last met, the focus shifted from crisis-fighting to figuring out how to establish a safer financial system for the future.

 

On the public stage, the message was one of solidarity as policymakers agreed they must keep spending the $5 trillion already earmarked as economic stimulus and delay any unwinding of emergency fiscal and monetary measures until economies are sturdy enough to stand on their own.

 

“We will continue to implement decisively our necessary financial support measures and expansionary monetary and fiscal policies, consistent with price stability and long-term fiscal sustainability, until recovery is secured,” said a final statement the Group of 20 ministers from rich and developing countries.

 

“We agreed need for a transparent and credible process for withdrawing our extraordinary fiscal, monetary and financial sector support as recovery becomes firmly secured,” it said. “Working with the IMF and the FSB (Financial Stability Board) we will develop cooperative and coordinated exit strategies, recognising that the scale, timing and sequencing of actions will vary across countries and across the types of policy measures.”

 

But behind the scenes, some G20 sources expressed frustration that there was not more progress made in curbing excessive pay packages for bankers—particularly those employed by firms that have received billions of dollars in government support.

 

“There is broad agreement on what to do. The problem is we need to go beyond agreement. We need to have concrete measures,” said International Monetary Fund chief Dominique Strauss-Kahn. “I’m impressed by the level of consensus but I’m still waiting for strong measures to be decided and also to be implemented at the national level.”


Bank pay and buffers

 

Much of the public pressure before the meeting had centred on excessive bank remuneration.

 

“It is offensive to the public whose taxpayers’ money in different ways has helped (keep) many banks from collapsing and is now underpinning their recovery,” British Prime Minister Gordon Brown said at the start of Saturday’s meetings.

 

Finance leaders broadly agreed that banks ought to hold more capital as a cushion against the sort of catastrophic losses that led to bank failures and bailouts.

 

The final statement said that banks would “be required to hold more and better quality capital once recovery is assured.”

 

“We call on banks to retain a greater proportion of profits to build capital where needed,” the statement added.

 

On bonuses in the financial sector, the statement fell short of calling for caps, saying that: “We also ask the Financial Stability Board to explore possible approaches for limiting total variable remuneration in relation to risk and long-term performance.”

 

That was seen as a compromise between countries including France and Germany that had pushed hard for pay limits and Britain, the United States and Canada which were opposed to caps.


Changing world order

 

The statement showed agreement that emerging nations like India and China should have a greater say in the running of the International Monetary Fund and World Bank but did not offer up any formula of how this should be achieved.

 

It said only that their voice in global economic policymaking would grow “significantly” and that it expected “substantial progress” to be made on the issue at a summit of world leaders in Pittsburgh later this month.

 

The BRIC group of leading emerging powers—India, China, Russia and Brazil—had laid out on Friday concrete targets for how much movement they wanted in IMF and World Bank quotas.

 

Date created : 2009-09-05

COMMENT(S)