UPDATE: Germany Applauds Banks' Bonus Step, Plans New Rules
December 11 2009 - 5:23AM
Dow Jones News
The German Finance Ministry Friday lauded German banks and
insurers' commitment to self-regulation on bonuses payments, and
said it will follow this up with additional rule changes.
"It is a positive signal that the largest German credit
institutes and insurers have committed themselves in this
declaration to apply the new standards for sustainable remuneration
already," Wolfgang Schaeuble, the finance minister, said in a
statement.
However, the ministry said self-regulation is only the first
part of its planned three-step strategy on bonuses.
The strategy is being drawn up in line with the bonus payment
agreement of the Group of 20 industrialized and developing nations,
to defer bonuses over several years and implement clawback
structures that allow bonus payments to be reduced if the long-term
results of investment decisions turn sour.
The first step is the self-regulation of Germany's leading banks
and insurers. In a second step, financial services regulator BaFin
will send a letter to banks and insurers on supervisory rules by
the end of 2009, at the request of the Finance Ministry. Thirdly,
the Finance Ministry will in the coming spring draft an oversight
law to change Germany's Banking Law and the Law on the Supervision
of Insurance Companies.
The Finance Ministry couldn't be reached to give more details on
the plans.
The self-regulation agreement, announced Thursday evening by
Deutsche Bank AG (DB) Chief Executive Josef Ackerman, was supported
by eight banks and three insurers, the finance ministry said.
The move came after the U.K. took a more radical step on
bankers' remuneration Wednesday, announcing a 50% tax on bonuses
paid by banks that exceed GBP25,000 annually. The tax will remain
effective until April 5, 2010. The government hopes the measure
will raise GBP500 million.
France is likely to introduce similar regulation in the future,
a senior French government official told Dow Jones Thursday.
The German signatories to self-regulation were Deutsche Bank,
Commerzbank AG (CBK.XE) Hypo Vereinsbank AG, DZ Bank AG, WestLB AG,
Landesbank Baden-Wuerttemberg, BayernLB and HSH Nordbank AG as well
as insurers Allianz SE (AZ), Talanx AG and Munich RE (MUV2.XE).
-By Andrea Thomas, Dow Jones Newswires; +49 30-2888-4126;
andrea.thomas@dowjones.com
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