A curb on bankers’ bonuses looks more likely after EU leaders agreed on a common stance ahead of a G20 summit next week.
The bloc’s presidency says rich nations have a crucial role in regulating to prevent another crisis. Banks bailed out with taxpayers money, it says, must not take advantage of better results in the future. The Swedish Prime Minister, Fredrik Reinfeldt, current holder of the EU presidency, said: “The bonus bubble burst tonight. We cannot accept that bank profits are private gains and bank losses are the tax payers’ responsibility.” Agreement was reached after France reportedly softened calls for a strict cap on bonuses, as long as other controls are adopted. President Sarkozy said the sticking point was the “overall limit of the size of the bonus”, but insisted that was “not a problem in the framework of the European position”. The EU leaders agree that the size of bonuses should be linked to long-term performance and boards of directors have to have oversight. Also, if a bank’s performance deteriorates, the leaders agree that bonuses could be reclaimed.