Regulators around the world will be handed new powers to limit the share of profits that banks can spend on bonuses under a compromise deal to be tabled in Pittsburgh this week at the G20 meeting of leaders of the largest economies.
Britain is warming to the proposal on the grounds that it will help financial institutions to divert more cash into building capital reserves. This month Gordon Brown blocked a proposal by President Sarkozy of France to cap individual bonuses, arguing that it would be unenforceableable. However, the Prime Minister is supporting a compromise solution to set a maximum percentage of profits that banks and other financial institutions can spend on bonuses. See story...
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