France’s top bankers have been summoned by President Nicolas Sarkozy to defend their bonuses.
Sarkozy is pressuring French banks not to pay big bonuses to traders and told them they have two weeks to explain how the bonuses meet tough new policies on compensation agreed at the last G20 world leaders’ meeting. Baudouin Prot, the boss of BNP Paribas, which has set aside one billion euros for possible bonuses, said: “As far as bonuses are concerned, French banks have agreed on measures to make sure things will never again be as they were before the crisis. We have decided to apply the G20 rules. We are determined to abide by them.” Plugging into public anger over bonuses Sarkozy wants the next G20 gathering, in late September in Pittsburgh in the US, to revisit the issue and adopt a tougher stance. Bonuses have generated controversy worldwide. In the US, legislation is making its way through Congress that would prohibit incentive-based pay packages that lead to excessive risk-taking, something which led to the financial crisis that tipped the world into recession.