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Officials: G20 leaders eye curbing bankers' pay

Officials: G20 leaders eye curbing bankers' pay

So just what are world leaders going to do about the pay packages, merit bonuses, retention bonuses, golden parachutes and headline-inducing retirement packages for bank executives that have enraged ordinary folks worldwide?
Well, they're working on it.
Two officials connected with delegations at the Group of 20 summit in London said Thursday that the discussion about executive bonuses came late to the negotiating table and has yet to be agreed upon by the 20 leaders. They spoke on condition of anonymity because they were not allowed to speak to the press.
France and Germany in particular have been pushing hard for an overhaul of the global financial framework, blaming the world recession on the "casino capitalism" prevalent in financial circles in the United States and Britain.
They argue that the remuneration packages in American and British banks promoted excessive risk-taking that ultimately led to the deepest global recession since the 1930s. They say instead of planning for the long-term, financial executives sought to maximize short-term cash returns.
Now, the backers of tighter regulation say all the leaders of the G-20 will agree to introduce legislation that aims to link pay to long-term performance, although a precise monetary limit is not expected to make it to the final G-20 communique.
Both President Barack Obama and British Prime Minister Gordon Brown have faced embarrassment and public outrage in recent weeks over the rewards paid to financial executives.
Former Royal Bank of Scotland Group PLC chief executive Fred Goodwin _ aged just 50 _ has seen the windows of his house and car smashed amid mounting fury over his $1.2 million annual pension, which came after British taxpayers had to rescue his bank.
French President Nicolas Sarkozy has said he will walk out of the summit if it fails to agree on stricter regulation of global financial markets.
Howard Wheeldon, senior strategist at BGC Partners, said markets are on guard for a general agreement on bonuses and rewards that punishes excessive risk-takers. Still, he urged G-20 leaders not to micro-manage the global financial system.
"Make do and mend, shutting the gate after the horse has bolted if you like, but hopefully not over regulation that throws the baby of recovery out with the bathwater," Wheeldon said.


Updated : 2021-10-17 16:55 GMT+08:00