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February 14, 2012
Bonus-happy banks risk tougher rules: Borg
Published: 13 Jan 10 12:43 CET | Double click on a word to get a translation
Online: http://www.thelocal.se/24358/20100113/
Swedish banks could be hit with even tougher restrictions on bonuses if they don’t follow new rules presented by the country’s financial system watchdog, finance minister Anders Borg warned on Tuesday.
- Renewed criticism over Swedish bank bonuses (11 Jan 10)
- Swedish economy over the worst: report (18 Dec 09)
- Big fat Greek bailout 'unlikely': Borg (9 Dec 09)
The finance minister’s comments come following reports from the Swedish Financial Supervisory Authority (Finansinspektionen – FI) that Swedish bank managers received bigger bonuses in 2009 than the previous year, despite lower profits due to the financial crisis.
Borg was also bothered by a story published in the Svenska Dagbladet (SvD) newspaper on Wednesday reporting that the amount of money set aside for bonuses in 2009 by Swedish bank SEB will likely exceed the bank’s profits.
“I’m convinced that we’re going to have a renewed debate about gradually strengthening the rules if the banks don’t get the message that the general public can’t accept this kind of behaviour, when profits depend to a great extent on public funding, ” Borg told TT.
Borg remains hopeful, however, that the new framework for bonuses laid out by FI will yield results.
According to the new regulations, bonus payments are to be based on earnings achieved over a long period of time and are to be paid out over a long period of time. In addition, a drop in profits could result in bonuses being reduced or drawn in altogether.
“It’s a very austere framework and I think that it’s fundamentally good,” he said.
At present, Borg doesn’t want to discuss alternatives for managing the bonus problem, such as the Left Party’s suggestion of a special tax on bonuses above a certain level.
“I don’t want to go into other options,” he said.
Both France and the UK have implemented a penalty on high bonuses, and the Obama administration is expected to announce banking fees later this week which could bring in up to $120 billion to cover losses incurred by the US government in its efforts to save the banking system from collapse.
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If a bank that has recieved bonus's gives big bonus's charge every single person in that bank involved from directors to the people recieving bonus's with fraud, Sieze there assets, jail them and audit there entire life, charging witih fraud anything that does not add up.
Then they might wake up and stop this nonsense.
Keep dipping the government stick into the pot of capitalism, see where that leads you.....eventually, there will be nothing in the pot to stir...
Why is it that here in the UK we bail the banks out, we get a HUGE deficit thanks to our genius Gordon Brown, and now WE have to pay AGAIN to close the hole created to bail the banks out. Am I the only one that sees this? I mean, we lend the banks billions and now we are presented with the bill by governments raising the VAT, raising the NHS contributions, raising all kinds of taxes and lowering pensions etc.
Uh, excuse me, we dont own ourselves money, the sodding BANKS own US!!
Let the b*st*rds pay back what they owe us BEFORE they start filling their own greedy pockets again. Why can this lot not be better regulated I wonder. Make new laws to ensure no bank can rule the countries again. They are far to powerful and still governments are afraid to kick them back in line. Ido not see that any government has learned a lesson, instead I see the deteriation of finances in the citicens that were forced to agree to this bail out.
You borrow money, fine, but you pay it back! Not rocket science, is it? Governments need to get our priorities straight and the banks are totally out of order to award the collossal failure THEY created in the first place!!
Well put.
They owe us, not us owe them.
"Permit me to issue and control the money of a nation, and I care not who makes it's laws"
If money is put into the economy through "bailouts" etc... Suddenly there is too much supply and you have concern for inflation. To remove money from the supply, you often see a rise in taxes. I am not surprised by any of the actions taken thus far. Now whether your £,$,€, or Sek loses 20% of it's value either through inflation or taxation, the end result is the same. The former just happens to be easier to swallow from a psychological perspective.
Fact is...and without google (well you can google later)... do you know how money is created (hint: not printed by the government)? Have you ever given it a moments thought? You don't have to answer on here, this is for you. And have you ever wondered why something so important in every society as monetary theory has never been taught in schools (university majors excluded)
No, I never wondered why monetary theory has never been taught in schools, but now that you mention it... it must be a conspiracy to keep us downtrodden and at the mercy of.... ummmm, of someone!!
Actually, monetary theory is taught in some schools. It's just so deathly boring, that you slip into a coma and don't remember a single useful thing about it later.