“The federal government welcomes the French proposal for an international initiative on pay in the banking sector,” Klaus Vater, a spokesman for Chancellor Angela Merkel, told a regular briefing.
“Compensation systems can contribute to systemic risks that can arise in banks. In Germany, we have already introduced a raft of measures to reduce excesses in managers’ pay,” he added.
French President Nicolas Sarkozy said Wednesday he would call for limits on bonuses for bank executives when he takes his campaign for greater regulation to the G20 summit in Pittsburgh on September 24-25.
“We will propose a strengthening of sanctions towards banks that do not play by the rules and we will even raise the issue of limiting the size of bonuses,” Sarkozy said in Paris.
Responding in a television interview on Wednesday, Merkel said she was “annoyed that in certain banks, everything is starting up again as it was before” and that the topic would be a “central theme” at the G20 meeting.
The French plans also received backing from Brussels, with European Commission President Jose Manuel Barroso on Thursday stressing the need for “reinforced ethics.”