The UK is well known in European circles for its singular approach to regulatory reform, in particular its tactical use of the “Opt Out”. All the more surprising therefore to see Gordon Brown getting together with Germany’s Angela Merkel and France’s Nicolas Sarkozy to agree a strategy on banking bonuses ahead of next weeks G20 summit.
The three heads of state have agreed to “explore ways to limit total variable remuneration in a bank either to a certain proportion of total compensation or the bank’s revenues and/or profits.”
While the accord is an attempt to address the problems of “out-sized” bonuses, there is no agreement on the taxation of bankers’ pay. However, it did mention the possibility of businesses being frozen out of G20 states if they do not agree with guidance on risky business activities.
The EU leaders also want a “roadmap for necessary reform of governance and representation at the International Monetary Fund, which must be completed in January 2011, and of the World Bank to be completed in spring 2010.”
For the full text of the letter please see the link below.