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Reinfeldt calls for end to banks' bonus culture

AFP/The Local · 16 Sep 2009, 07:28

Published: 16 Sep 2009 07:28 GMT+02:00

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His comments came 10 days before a meeting of the Group of 20 top developed and developing countries in Pittsburgh to discuss new ways to regulate the global financial system.

"The bonus culture that has emerged must come to an end. We have a unique opportunity to make progress on this issue when world leaders meet in Pittsburgh," Reinfeldt told the Swedish parliament, the Riksdag.

"More stringent rules are needed to restrict over-generous bonuses and compensation systems," he added.

The Swedish government said in March that it would ban all bonuses in all public companies and called on the private sector to follow its example.

On September 5th, G20 finance ministers agreed at a meeting in London that the bonus system should be transparent and should only reward long-term success.

They also said bonuses should be not handed out to bankers who performed badly and created losses.

France has been pressing for a cap on bonuses but that proposal has found little favour with Britain or the United States.

Reinfeldt, whose country currently holds the presidency of the European Union, said meanwhile there were "ever more signs now indicating that both the global and the Swedish economies are beginning to stabilize.

Story continues below…

"We seem to have weathered the worst of the storms. The risks of a substantial economic downturn have abated," he said.

AFP/The Local (news@thelocal.se)

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Your comments about this article

10:09 September 16, 2009 by antoniolgj
So. TL has removed the comments from Kassir's report.

I see you guys are following step by step the manual "how to create a happy Orwellian state".

Mr. Editor do you really think ignoring what the people think about immigration in general, and Islam in particularly, will make them change their minds?
10:31 September 16, 2009 by IrvingD
Well this is sad news to all employees, especially at large banks. As the Swedish Prime Minister Fredrik Reinfeldt took aim at bonuses common at large banks when he opened the Swedish parliament on Tuesday, saying big bonuses "must come to an end". – What does he means of this? Do he really wants to create chaos among labor union? Actually we all know that not all banks are doing well, the Federal Reserve is being hailed as the prime mover in the bank bailout to avoid more bank failures, even though banks are still failing. Some things nobody knows – the Federal Reserve aren't part of the government; it's actually a private group. There is little or no Congressional oversight – and this is who prints our money. Health care reform and the gay marriage debate are great distractions, but the unchecked powers of the Fed are more or less unknown to the people. Perhaps an audit and reigning in of the Federal Reserve would be a good idea, before Wall Street gets another pay day. Good luck to Swedish Prime Minister Fredrik Reinfeldt - I hope he has a good explanation to his "action".
13:33 September 16, 2009 by karex
Audits for all government agencies in general is a great idea. I think they should post interim reports showing exactly how the taxpayer's money is being spent, just like private companies have to account to their shareholders.

This comment is not aimed at any contry in particular, but to state-run organizaitons in general. If governments were run more like businesses we would see a lot more benefits for our hard-earned tax money.
19:00 September 16, 2009 by Weekend_warrior
@Karex -- I think when Reinfeldt referred to public companies, he meant the ones that trade on the stock exchange.

Private companies have no shareholders and are responsible to no one. So he meant Swedbank, Handelsbanken, Nordea, SEB etc.... not private equity groups and banks.

There will be minor changes and inconveniences for the banking industry. You will either see large salary increases or the bonuses will be exercised as share options.
21:32 September 16, 2009 by BCR
Not that i disagree with Reinfeld's sentiments, but to be honest, I don't think anyone outside of Sweden will give a damn what he thinks. Along with many other pension contributers, I believe that the overwhelming majority of the profits generated through the leveraging of our assets should be returned to the investors, not the monkeys operating the computerized trading program.

It would be funny to see Fox News reaction to this statement at the G20 conference... but Fox will probably be too busy holding their "tea parties."
12:53 September 21, 2009 by karex
@weekend warrior

Yes, I know what he meant. But in restrospect I guess my comment could be a bit confusing. My point was just that I think it would be wise of them before criticizing the speck in someone else's eye, to first address the boulder in theirs...

Wha's the difference between bonuses and organizing a seminar in Majorca? I see none, the only difference is that I take exception with the activities funded by tax money.
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