The G20 leaders reached a historic agreement to put the G20 at the centre of their efforts to work together to build a durable recovery while avoiding the financial fragilities that led to the crisis.According to FT, a communiqué will be issued that will say: “We designate the G20 to be the premier forum for our international economic cooperation.”
FT continues:
The communiqué, a substantial document of more than 20 pages, seen by the Financial Times, has familiar language on reforms to the financial system and bankers’ bonuses.An interesting part of this communiqué is the continued focus on bankers' pay. Remember, the Financial Stability Forum is headed by Mario Draghi, who Geithner met with earlier this week. None of this communiqué is a surprise to Geithner.
It will endorse a report from the Financial Stability Board that calls for bonuses to be linked to the long-term success of financial companies and not excessive risk taking. It will outlaw multi-year bonuses, call for bonus payments to be deferred and establish mechanisms for clawing back bonuses paid if a company subsequently fails. There will not, however, be a formal cap on individual bankers’ bonuses.
Instead, the communiqué will propose “limiting bonuses as a percentage of total net revenues” when it is inconsistent with a bank’s sound capital base.
So what is all this focus on bankers' bonuses about, apparently with the endorsement of top insiders such as Geithner and Draghi? Draghi, being a former Goldman Sachs man and Geithner being a long-term tool of Wall Street, what is going on? This looks like it has top level Wall Street endorsement. Endorsement of a limitation on Wall Street bonuses by the Wall Street elite, WTF? The only conclusion that makes any sense is the argument developed by Robert Murphy, How to Predict the Coming Bank Pay Regulation, top insiders are trying to limit pay to lower echelon players. The pigs at the trough are trying to muscle out nursery pigs.
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