What is at stake: The question of remuneration in the financial services’ industry has become central and featured to a large extent on the agenda of finance ministers from the G20 group of leading industrialised and emerging economies as they met in London last Friday and Saturday, setting the stage for a full-blown G20 summit in Pittsburgh on September 24-25. European Union finance ministers agreed ahead of the meeting to jointly press for clearly defined restrictions on bonus pay for bankers but splits emerged over how to do it. Several options are still discussed: Mandatory deferrals of bonuses, holding periods for stock options and clawbacks in the case of negative outcomes to link pay to risk and long-term performance; limits… Read more
Bruegel blog
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Capping bankers’ bonuses
3rd September 2009
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G20 Readout
5th April 2009
In this post, Nicolas Véron looks at the London summit which took place on 2 April 2009, and compares what was achieved with what could realistically be expected. This lead him to a fairly positive assessment. The author believes the G20 was really about global economic and financial institutions which have a huge role to play. In fact, as the G20 represents around two-thirds of the world‘s population and nine-tenths of its economic activity, the G20 has unique legitimacy to shape them, by defining and updating their mandate, governance and funding. An assessment of the London Summit must be based not only on what the most pressing issues of the moment are, but also on what the G20 can and… Read more
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The Ruses of the crisis
5th April 2009
Jean Pisani-Ferry believes that while the G20 countries did not agree to change their individual policies, they did rally round what is starting to look like a global policy. He looks at the creation of Special Drawing Rights (SDRs); the significant increase in the resources of the international financial institutions; decisions and shortcomings regarding governance of the IMF and Wolrd Bank and finally regulation. For the author, the contours of economic and financial governance at a global level have been defined during the summit. At the world economic conference of 1933 in London, it was with a killer telegram about the [monetary] ‘fetishes of so-called international bankers’ that Roosevelt put paid to already very wobbly international cooperation. Given a Barack… Read more
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An agenda for the London Summit
10th March 2009
In this column, Nicolas Véron looks at what the London Summit of the G20 on 2 April can and cannot achieve. He argues that the G20 should concentrate on governance issues, the area where it is best equipped to add real value. Given the circumstances, reform of the International Monetary Fund should come on top of on its agenda. The London Summit on 2 April will be the second held at heads-of-state-and-government level by the G20. This debating forum carries significant legitimacy as it represents twothirds of the world’s population and nine-tenths of its economic activity.The previous session on 15 November in Washington DC was just a warm-up. The G20 countries must now face up to a wholly different crisis.… Read more
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The crisis multiplier
15th February 2009
Jean Pisani-Ferry believes that for governments it is critical to agree on a set of fail-safe measures which distinguish between what action is temporarily permitted and what action is to be avoided at all costs. Agreeing a code of conduct of this kind could be one of the objectives of the April G20 in London. The exact numbers remain up in the air but the trend gives cause for concern. Global trade is contracting at a rate of knots, is spreading the crisis from country to country and is everywhere magnifying the impact of the fall‐off in domestic demand. The mechanism which before transmitted increasing growth rates has now been thrown into reverse. The shock is especially abrupt for heavily… Read more