British banks agree to G20 bonus curbs
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Five of Britain’s biggest banks have signed up to measures to curb bankers' bonuses agreed at last week's Group of 20 summit in Pittsburgh, said British finance minister Alistair Darling in a joint statement with the banks.
AFP - Britain's five biggest banks have signed up to measures to curb bankers' bonuses agreed at last week's Group of 20 summit in Pittsburgh, they announced alongside the government here on Wednesday.
"The UK's top five banks have committed to leading the way in implementing reforms to bank remuneration agreed by the G20 in Pittsburgh," British finance minister Alistair Darling said in a joint statement with the banks.
Barclays, HSBC, Lloyds, RBS, and Standard Chartered said they welcomed "the G20 remuneration reforms, and their global nature, as it is essential that banking reward is consistent with effective risk management and that there is parity both nationally and internationally on these issues."
G20 world leaders last week pledged to end risky trading by bonus-greedy bankers.
"We committed to act together... to implement strong international compensation standards aimed at ending practices that lead to excessive risk-taking," the 20 largest rich and emerging economies said.
"Excessive compensation in the financial sector has both reflected and encouraged excessive risk taking. Reforming compensation policies and practices is an essential part of our effort to increase financial stability," the G20 had added in a communique.
Curbing bankers' bonuses is part of tougher regulation to tackle systemic weaknesses that led to the global financial crisis. Many blame high bonuses for encouraging excessive risk-taking that led to the worst economic downturn since the 1930s.
"It is vital that our financial services industry remains at the forefront of the industry globally and takes a responsible and long-term approach to remuneration," Chancellor of the Exchequer Darling said in Wednesday's statement.
"I am therefore pleased that the main banks incorporated in the UK have agreed to lead the way in implementing the agreement reached on bank remuneration at the G20, and expect them to set the standard for all other UK and international financial institutions to follow," he added.
Meanwhile France's President Nicolas Sarkozy was due to meet on Thursday with the heads of French banks to review the G20 proposals and announce his government's planned measures, his office said.
Banks in the Netherlands, not a member of the G20, imposed their own limits on executive bonuses and salaries earlier this month.
According to a banking code published by the Netherlands Bankers' Association (NVB), banking executives will from January 1 have bonuses limited so as to not exceed their annual salaries.
Salaries will have to be below a median figure for comparable jobs, bonuses may have to be returned if the bank runs into trouble and dismissal pay cannot be higher than a year's salary, the new code said.
Executive board members will also be prevented from exercising stock options within three years of receiving them.
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