Dutch set bank bonus reform marker, eyes on G20

AMSTERDAM/LONDON – A Dutch move to cap bonuses for bankers throws down a marker for other countries, but the pace of international sector reform hinges on world leaders’ ability to coordinate policy later this month.

The Dutch voluntary code, released by banking group NVB on Wednesday, calls for bonuses for management board members to be capped at the level of their base salary and gives scope to ‘claw back’ previous payouts. The changes would come into force from the start of next year.Neighbouring countries and banks say that for the Dutch move to form the basis of a global standard, it needs internationally coordinated implementation of political, regulatory and public will.The best chance for that is from a G20 meeting of world leaders in Pittsburgh on September 24-25.’The Dutch may have been prepared to stick their neck out but I don’t think that will be sufficient to bring the rest of Europe into line with them at this stage, because there are too many competing interests to be balanced,’ said Ben Kingsley, a partner at law firm Slaughter and May in London.’Pittsburgh is the most likely moment for a real proposal that might stick, anything else is probably testing the water ahead of that meeting.’The problem is what German economics minister Karl-Theodor zu Guttenberg has called the ‘level playing field’ – the risk that some countries regulate bonuses and others don’t.Several countries have said they plan to ban multi-year guaranteed bonuses or force banks to pay bonuses over longer timeframes or with a greater proportion in shares.Bonuses for staff at banks taking taxpayer help are under particular scrutiny. European Union competition regulators plan to take a closer look at bonuses at those banks, the EU’s antitrust chief said on Friday, which will include several Dutch lenders and others like Royal Bank of Scotland and Lloyds.-Nampa-Reuters