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Sweden calls for EU unity to curb bank bonuses

AFP/The Local · 4 Sep 2009, 14:23

Published: 04 Sep 2009 14:23 GMT+02:00

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Reinfeldt supported calls from Sweden's finance minister Anders Borg on Thursday calling for an end to the bumper bonus culture. Borg has argued that "the banks were partying like it was 1999, but it is actually 2009. The bonus culture must come to an end and it must come to an end in Pittsburgh."

France and Germany have already expressed a wish for the EU to agree on a common position on financial sector bonus and pay issues ahead of the G20 summit, to be held in Pittsburgh at the end of September.

Britain has also talked about curbing excessive bonuses but the devil remains in the details, with London not happy with the French idea of introducing caps on bonuses, with an eye on the city's massive financial sector.

On Friday, seven European finance ministers, including Sweden, also called for strict rules governing bankers' bonuses, arguing that in some instances the payment of such compensation has been "improper, cynical and unacceptable."

The ministers, in a hard-hitting letter published in newspapers in all seven countries, appealed to their colleagues in the Group of 20 to back their demand that "a strict compensation policy be put in place."

The ministers, representing Sweden, the Netherlands, Luxembourg, France, Spain, Germany and Italy, said guaranteed bonuses for more than one year should be banned.

Exorbitant banker bonuses were also on the agenda for finance chiefs from the 20 leading developed and developing countries, meeting in London to discuss steps to sustain a nascent recovery in the world economy.

Some banks rescued by crisis-related public assistance are continuing to distribute fat bonuses, a practice that has sparked outrage in Europe and elsewhere.

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Reinfeldt said that the EU summit would be "looking at suggestions close to what (French) President Sarkozy has proposed on bonus limits."

He underlined: "Banks would have gone bankrupt without taxpayers' money and to say now 'it's business as usual', to go back to bonuses, is not correct."

Bankers "will see a growing reaction from the citizens. It's important to send a signal 'don't get back to the situation where it started'," he stressed.

AFP/The Local (news@thelocal.se)

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Your comments about this article

20:56 September 4, 2009 by Thebinary1
What bullshit! If Reinfeldt was actually serious he would have reworked the tax rules to target the bankers and their bonuses.

I mean, a 90% tax levied on a person with the profession "banker" whose income for the year was USD 50,000,000 .... now that's justice!!
05:47 September 5, 2009 by lancer
Justice? Thebinary1 wants justice? Ever lied, ever cheated, ever stolen anything no matter how small? Be careful what you wish for you may get it. After all, Justice is blind, and it doesn't matter the amount or size. It's not nice to lust after something somebody else has, some may even call it sin. You probably wouldn't though.
08:28 September 6, 2009 by Angst
Reinfeldt and Borg are just playing to the gallery, I don't believe its possible to limit bonuses by passing a law, and G20 wont do it either. But its a cheap way to curry electoral favour, especially when they need have no fear of it going beyond words.
08:41 September 6, 2009 by Nemesis
This is blatant hypocrisy and popularism.

The German Chancellor, Angela Merkel has been trying for years, long before the present crisis to bring in more bank regulation at European level and she was not listened to. The United Kingdom, Sweden, Ireland, Spain and Italy were all opposed to any proposition that Merkel made to regulate the banks.

One of the worst offenders in Europe is Swedbank. There are two banks in europe that I believe should be nationalised and all staff above branch manager fired. Anglo Irish Bank in Ireland and Swedbank in Sweden. They would deserve it. That is so that there internal structures can be changed to resemble banking sanity, before being refloated on the stock exchanges, with a ban on previous staff holding positions or being consultants.

I think every country in Europe should have at least one bank made an example of. If it is acceptabel for the population to suffer, it is acceptable for bankers to suffer.

There needs to be European wide law, that ensures that banks can back up there lending with assets and behave as banks, not as some sort of social pruning excercise.
23:49 September 6, 2009 by lingonberrie
Yes, by all means do so.

Otherwise the alternative is the multi-billion Wall Street dollar bonuses of old, that is, before they had a recent miraculous recovery using the people's tax money to stay alive. Now, even in their Depression, they are again paying billions in bonuses.

Wall Street has already recovered enough to "bundle" life-insurance policies that the poor elderly have been forced to sell for cash, so that Wall Street can offer these "lucrative" instruments to make billions, something akin to their corrupt manipulatlons with the "sub-prime" mortgages that they knew the people could never afford, and, that in effect exported their Depression to Sweden.

Sweden does not need nor want that corruption.
07:35 September 7, 2009 by Angst
If only Sweden were an island unto itself. But we live in a global economy, which is why its not going to happen, whatgever decisions G20 makes - its just ineffective posturing.
15:26 September 7, 2009 by DamnImmigrant
@Thebinary1 - "If Reinfeldt was actually serious he would have reworked the tax rules to target the bankers and their bonuses"

EXACTLY!!! The real way to put corporate greed in check is through taxes!

"It is GREAT! I got a 200 million dollar bonus last year! Unfortunately, I only got to take home 1 million of that!"

Guess who got the OTHER 199 million dollars!

Corporations will stop paying out such large bonuses if the government removes the tax incentives!
18:34 September 8, 2009 by thegreenmarket
Heads of state are responding to the widespread public outcry over the perception of excessive compensation in the banking industry. However COP 15 is now only 3 months away, and while political rhetoric scores points with a disgruntled public, it siphons energy away from the tremendous efforts required to find consensus on climate change.

See "Bank Bonuses and Climate Change"

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