Pittsburgh, Pennsylvania welcomed the G-20 Summit this week. Our Treasury Secretary, Timothy Geithner, is leading the discussion on limiting pay and bonuses for bankers in the world’s largest economies.
A “basic agreement” has been reached, but no dollar figures have been announced. One source that I refuse to link, reports that the agreement will be finalized on Friday, September 25th. The same report says that Europeans are “horrified” that financial institutions might get back in the habit of high pay and even higher bonuses. French President, Nicolas Sarkozy threatened to walk out if an agreement is not reach.
Now, remember the earlier talk from the Obama administration about limiting pay and bonuses to bankers? Some referred to as “analysts” say that Obama is “at the forefront of the fight against such measures….” What???
In January, Obama called it “shameful” that U.S. financial executives had bagged $18.4 billion in bonuses in 2008. Earlier this month, he scolded a Wall Street audience: “We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis,” in which “too many were motivated only by the appetite for quick kills and bloated bonuses.”
This article from February 2009 out London said “the days of wine and roses — and company=paid country club memberships — are fading fast for international bankers.”
The move to slash their salaries, bonuses and perks extends far beyond the United States, where President Barack Obama has limited salaries to $500,000 for those whose banks accept bailout money. In Europe, some bankers are being forced to renounce bonuses and accept salary caps, while others have volunteered to do so to quell public anger.
Everyone believing Obama is truly not lusting to restrict banker’s pay, send me an email or leave a comment.
Once the agreement, (probably a non-binding agreement) is finalized, each country will “set separate standards.” Fortunately for world economies, [barf bag alert] the new “Financial Stability Board” comprised of international bankers and regulators will be the watchdog.