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| Joint call for bank bonus rules | Joint call for bank bonus rules |
| (9 minutes later) | |
| The Group of 20 richest nations must adopt "binding rules" to regulate bank behaviour, the leaders of the UK, France and Germany have said. | The Group of 20 richest nations must adopt "binding rules" to regulate bank behaviour, the leaders of the UK, France and Germany have said. |
| UK Prime Minister Grown Brown, French President Nicolas Sarkozy and German Chancellor Angela Merkel made the comments in a joint letter. | UK Prime Minister Grown Brown, French President Nicolas Sarkozy and German Chancellor Angela Merkel made the comments in a joint letter. |
| They also agreed to explore ways of limiting bonuses at banks to prevent future financial meltdowns. | They also agreed to explore ways of limiting bonuses at banks to prevent future financial meltdowns. |
| The G20 meets this month to discuss the state of the global economy. | The G20 meets this month to discuss the state of the global economy. |
| Compensation | Compensation |
| In the letter, the three leaders say "speculative activities that constitute a risk to financial stability should also be discouraged by increasing capital requirements". | In the letter, the three leaders say "speculative activities that constitute a risk to financial stability should also be discouraged by increasing capital requirements". |
| They also discussed banker compensation, which has been the subject of much debate in the run-up to the G20. | They also discussed banker compensation, which has been the subject of much debate in the run-up to the G20. |
| "We should 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," they said. | "We should 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," they said. |
| Bonuses will be on the agenda when the G20 leaders meet in Pittsburgh later this month. | Bonuses will be on the agenda when the G20 leaders meet in Pittsburgh later this month. |
| "The G20 should transform the above principles into binding rules for financial institutions with sizable complex and risky business activities and ensure that there are sanctions at national level for banks that do not play by these rules," reads the letter. | "The G20 should transform the above principles into binding rules for financial institutions with sizable complex and risky business activities and ensure that there are sanctions at national level for banks that do not play by these rules," reads the letter. |
| Finance ministers meet in London from Friday, ahead of the G20 meeting. | Finance ministers meet in London from Friday, ahead of the G20 meeting. |
| The statement is a sign of unity on bank bonuses, after mixed signals on the European Union's willingness to act on the issue. | |
| 'Partying like 1999' | 'Partying like 1999' |
| France is proposing a series of mandatory caps on bonuses - which the head of the Eurogroup of eurozone finance ministers, Luxembourg's Jean-Claude Juncker, said he "totally supported". | France is proposing a series of mandatory caps on bonuses - which the head of the Eurogroup of eurozone finance ministers, Luxembourg's Jean-Claude Juncker, said he "totally supported". |
| The comments came ahead of this weekend's finance ministers' meeting | The comments came ahead of this weekend's finance ministers' meeting |
| The UK opposes curbs on bonuses, with Prime Minister Gordon Brown preferring payouts based on long-term success. | The UK opposes curbs on bonuses, with Prime Minister Gordon Brown preferring payouts based on long-term success. |
| However, it has been acknowledged that the UK must be persuaded to give its support if French President Nicolas Sarkozy's desire to push through strong G20 regulation on the issue is to succeed in Pittsburgh. | However, it has been acknowledged that the UK must be persuaded to give its support if French President Nicolas Sarkozy's desire to push through strong G20 regulation on the issue is to succeed in Pittsburgh. |
| UK Chancellor Alistair Darling said the French plan to cap bonuses would be "unworkable". | UK Chancellor Alistair Darling said the French plan to cap bonuses would be "unworkable". |
| But he saw "no problem" with the French plans to claw back bonuses after three or four years if they were not justified by performance. | But he saw "no problem" with the French plans to claw back bonuses after three or four years if they were not justified by performance. |
| In comments ahead of the finance ministers' meeting in London, Sweden's Anders Borg said it was "very important that we as politicians give a clear message that old bonuses must come to an end". | In comments ahead of the finance ministers' meeting in London, Sweden's Anders Borg said it was "very important that we as politicians give a clear message that old bonuses must come to an end". |
| "The bankers are partying like it's 1999, and it's 2009. The bonus culture must come to an end and it must come to an end in Pittsburgh," he said, calling for finance ministers to have a "common message" on bonuses. | "The bankers are partying like it's 1999, and it's 2009. The bonus culture must come to an end and it must come to an end in Pittsburgh," he said, calling for finance ministers to have a "common message" on bonuses. |
| Observers say the issue of bonuses is not one on which consensus will be easily reached. | Observers say the issue of bonuses is not one on which consensus will be easily reached. |
| Exit strategies | Exit strategies |
| Removing government stimulus packages will also be on the agenda at the G20 meeting. | Removing government stimulus packages will also be on the agenda at the G20 meeting. |
| Germany and France want the G20 to discuss "exit strategies" from the measures used to stimulate economies at a meeting of finance ministers. | Germany and France want the G20 to discuss "exit strategies" from the measures used to stimulate economies at a meeting of finance ministers. |
| With Japan, France and Germany officially out of recession, minds are turning to co-ordinating the withdrawal of billions of aid and stimulus measures that were injected into countries by their governments over the past year. | With Japan, France and Germany officially out of recession, minds are turning to co-ordinating the withdrawal of billions of aid and stimulus measures that were injected into countries by their governments over the past year. |
| But Mr Darling told the Independent: "The biggest single risk to recovery is that people think the job is done." | But Mr Darling told the Independent: "The biggest single risk to recovery is that people think the job is done." |
| "There is a real risk that either governments or people generally think, 'We have done that, we are on the path to recovery,'" Mr Darling told the newspaper. | "There is a real risk that either governments or people generally think, 'We have done that, we are on the path to recovery,'" Mr Darling told the newspaper. |
| "A lot of obstacles" remained to be negotiated on the path to recovery, including rising oil prices and unemployment, Mr Darling said. "We are at a critical stage," he added. | "A lot of obstacles" remained to be negotiated on the path to recovery, including rising oil prices and unemployment, Mr Darling said. "We are at a critical stage," he added. |