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Sep 5, 2009
Call to end bank bonus culture

LONDON - EUROPEAN finance chiefs on Friday called for an end to the bonus culture among bankers, highlighting a split with the US at G20 talks also debating the winding down of emergency support to the world economy.

Finance ministers from the world's richest countries and top emerging powers are using the two-day meeting in London to lay foundations for a Group of 20 leaders' summit in the US city of Pittsburgh on September 24-25.

Bankers are again in the crosshairs of European countries led by France and Germany who argue their lucrative compensation schemes fuelled a short-term pursuit of profit that helped destabilise the financial system.

Arriving at the meeting, France's finance minister Christine Lagarde pledged to launch an 'onslaught against bonuses.' She indicated she would ratchet up the pressure on the US and Britain, telling reporters governments should be responsible to voters, not financiers.

'The bonus culture must come to an end and it must end at the G20 meeting in Pittsburgh,' Ms Lagarde and colleagues from six European countries including Germany wrote in the Financial Times on Friday.

'We must be very clear: these practices are not only dangerous, they are improper, cynical and unacceptable.' The strongly-worded letter - which raised capping and taxing bonuses - indicated splits on the issue.

Britain and the United States, keen to protect major financial centres in the City of London and Wall Street, are reluctant to go so far.

The US sees bonuses as a 'non-subject", according to a European official who spoke anonymously.

And British finance minister Alistair Darling, host of the London meeting, told the BBC on Friday that he did not think mandatory capping was 'a practical proposition' although Britain has backed more moderate action.

Sweden, which holds the rotating European Union presidency, has called an extraordinary summit of EU leaders on September 17 ahead of the Pittsburgh summit which will seek a common position on curbing bonuses. -- AFP

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