EU leaders have agreed on a joint strategy to curb excessive bankers' bonus payments ahead of next week's G20 summit in Pittsburgh, putting pressure on US President Barack Obama to support fundamental financial reforms. At a special summit in Brussels European leaders on Thursday agreed that bonuses must be cancelled in case of negative development in the bank's performance. The proposed reforms would link compensation to a bank or business' performance and install a waiting period before stock options could be exercised. German Chancellor Angela Merkel described the meeting as a "success" and said that demands from Germany, France and Great Britain were fully implemented and adopted as a European position. The three countries had called for bonus payments to be paid in line with banks' profits and for "guaranteed bonuses" to be stopped. Merkel demanded a "charter for a sustainable economy" and British Prime Minister Gordon Brown called for a "new system of managing our global economy."
At a special summit in Brussels European leaders on Thursday agreed that bonuses must be cancelled in case of negative development in the bank's performance. The proposed reforms would link compensation to a bank or business' performance and install a waiting period before stock options could be exercised.
German Chancellor Angela Merkel described the meeting as a "success" and said that demands from Germany, France and Great Britain were fully implemented and adopted as a European position. The three countries had called for bonus payments to be paid in line with banks' profits and for "guaranteed bonuses" to be stopped.
Merkel demanded a "charter for a sustainable economy" and British Prime Minister Gordon Brown called for a "new system of managing our global economy."
European Union leaders have agreed to seek a global deal for bankers' bonuses to be clawed back if profits fall.The leaders meeting in Brussels approved the clause as part of a common EU position for next week's G20 summit in Pittsburgh in the US. They want the threat of sanctions to be used to force banks to link bonuses to long-term performance. There is concern the current system may encourage short-term risk-taking, which helped trigger the banking crisis. Speaking ahead of the meeting, UK Prime Minister Gordon Brown said there was broad backing for bonus restrictions.
European Union leaders have agreed to seek a global deal for bankers' bonuses to be clawed back if profits fall.
The leaders meeting in Brussels approved the clause as part of a common EU position for next week's G20 summit in Pittsburgh in the US.
They want the threat of sanctions to be used to force banks to link bonuses to long-term performance.
There is concern the current system may encourage short-term risk-taking, which helped trigger the banking crisis.
Speaking ahead of the meeting, UK Prime Minister Gordon Brown said there was broad backing for bonus restrictions.
