Europeans Ask Geithner About Wall Street Bonuses

In a global economy, the world’s central banks have become increasingly intertwined and interdependent.  This often creates interesting confrontations, especially when they are public.  This is what makes this Bloomberg news article interesting.  Since this article was published in June 2011, Europeans have imposed some salary caps on their top CEOs, yet that discussion has not reached the U.S. 

“Geithner to Be Confronted by EU’s Barnier on Lack of Bonus Rules,”
By Ben Moshinsky, Bloomberg

June 1, 2011

“Michel Barnier, the European Union’s financial services commissioner, will confront U.S. Treasury Secretary Timothy F. Geithner over the lack of American rules to restrict bonuses for financial-services workers.

The absence of binding laws regulating bankers’ pay in the U.S. means lenders can avoid curbs envisaged by the Group of 20 Nations in Pittsburgh in 2009, Barnier will tell Geithner when they meet in Washington tomorrow.

Only the EU has imposed such rules and the U.S. approach ‘to go for non-binding measures leaves too much latitude’ for banks and ‘allows them to circumvent the principles set out in Pittsburgh,’ Barnier’s spokeswoman Chantal Hughes said in an e- mail about the meeting.”

Under EU rules, “60% of a bonus payout for risk-takers and senior managers must be deferred for at least three years, and half of the remaining amount must be in the form of shares.”

This reduces the emphasis on short-term gambles and gives the trader a serious interest in long-term results.

Source: “Geithner to Be Confronted by EU’s Barnier on Lack of Bonus Rules.”

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Chuck Epstein

Chuck Epstein

Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry.

He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial.

He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site, www.mutualfundreform.com, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).

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