Brussels limits the traders' bonuses
Bonuses for traders and bankers in Europe, accused of encouraging rampant speculation during the crisis, will be capped for the first time from next year, following the final adoption of a text with meaning Wednesday.
Two years after the outbreak of the financial crisis of 2008-2009, part of the United States with the bankruptcy of Lehman Brothers, the European Parliament in Strasbourg approved the text, which was the subject of a June 30 Agreement between the elected and the states of the EU.
In 2011, the bonus must not be disproportionate to the fixed salary and cash bonuses will be capped at 30% of the total premium, or 20% on premiums particularly important.
End outlandish bonuses
Much of the bonus will be paid immediately and will not be after a period of at least three years to allow the employer to recover some cases where investment does not function as expected.
Finally, at least 50% of a total bonus will be paid as contingent capital, which can be recalled in case of banking difficulties, so that taxpayers do not end up in the front line when a bank gets into difficulties.
In the case of banks that receive public subsidies, the text also provides that "no variable compensation should be paid the officers of the institution unless it is justified."
"Europe gets the rules of coaching salaries of bankers and traders with the most aggressive in the world," said a French Green MEP, Canfin Pascal, who negotiated the text free credit reports. "By limiting the proportion of variable pay in total compensation, this text will finally put an end to extravagant bonuses synonymous with extravagant risks," he added.
A text to the liking of the banking sector
"Two years after the outbreak of the global financial crisis, these tough new rules on bonuses will transform the culture of bonuses and incentives to end the excessive risk-taking", claimed that his side the Socialist Arlene McCarthy, parliamentary rapporteur on file at the agreement in principle on June 30
The text is however not to the liking of the banking sector."We believe that the agreement goes too far, because at the international level, there are already some principles" in the form of recommendations that were made including the Financial Stability Board (FSB), had informed the AFP secretary general of the European Banking Federation, Guido Ravoet after the tentative agreement. "We believe that this is not the public authorities to make amounts, percentages," he added, saying that this responsibility should be left to banks.
"If the international level, it does not follow Europe, European banks have a competitive disadvantage," says Guido Ravoet, who believes that "financial centers like New York, Singapore and Hong Kong will benefit."