Europe takes tough line on banker pay ahead of G20 summit

[MARALE]

Source: Marketwatch.com

European officials vowed over the weekend to press for tough restrictions on bankers' pay despite opposition from the United States when leaders of the world's most powerful economies meet in Pittsburgh later this week for the Group of 20 summit.

But at the same time, calls to link pay to levels of speculative activity rather than putting outright caps on bonuses could provide an avenue to compromise, news reports said.

"I know well the American mentality and it is going to be a hard slog, I can't pretend," French Finance Minister Christine Lagarde said in an interview with the Journal de Dimanche Sunday newspaper, according to Reuters.

And European Commission President Jose Manuel Barroso on Sunday told France TV5 that the E.U. should limit bonuses regardless of whether the United States agrees to a plan. ...

Read more: http://www.marketwatch.com/story/europe-talks-tough-on-bank-bonuses-ahead-of-g20-2009-09-21

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why do we oppose this? I know, I know... free market. But this would be a great idea and put confidence back with the banks if this happened.

[RussBLib]

1. I thought that WE were trying to control bankers salaries

All this talk about how we cannot allow the banking system to revert back to their careless ways, and Europe is taking the hard line? Sometimes I feel there is just no hope for America, even with the Hopemeister in charge.

[Betty Karlson]

2. What is more, it would prevent hyper-speculation

Free market is a wonderfull thing, but freedom doesn't equal anarchy.

And since trading speculative essets is essentially blowing speculative bubbles, which pop, allowing this trading to get out of hand is creating the potential for anarchy - and thereby a threat to the free market rather than an incentive. And capping excutive bonuses would be a strong incentive to NOT GO THERE. The world would be lot more stable if everyone agreed to stick to reality-based assets. We would live through no more times of extreme affuence, true. And we would not live through another world-wide depression either. No peaks, no all-time lows. Normal economic cycli- how does that sound to you?

So the bankers can just be deferred from speculating on speculation. The world's economies do not serve at the pleasure of 200 CEOs.

[MARALE]

3. This is important fo reveryone to see

There should be caps on pay and incentive. I think if yo get paid that much, there should be risk. They have taken all of the risk out and placed it on the shareholders.