As preparations for the Pittsburgh summit on 24 and 25 September gather pace, the three leaders said they wanted to seize the opportunity in Pittsburgh and relay "a strong joint message" on stimulus plans and tough regulation enshrined in binding international agreements.
In a letter addressed to the Swedish EU Presidency, the establishment of an international regulatory framework is identified as a key issue. Banks, they say, will not be allowed to return to business as usual though the abatement of financial tensions may have led some to believe otherwise. Disclosure requirements on banks would ensure greater transparency, the letter states.
Equally harsh words are aimed at the bonus culture in financial services: "Our citizens are deeply shocked at the revival of reprehensible practices, despite taxpayers' money having been mobilised to support the financial sector at the height of the crisis."
To this end, the leaders will propose in-house compensation committees to oversee remuneration policies. Bonuses should also reflect risk-awareness, whereby negative developments and performance across the board should impact the distribution and amount of the awards; guaranteed bonuses "are to be avoided".
Merkel and Sarkozy had already shown their solidarity on a crackdown as a joint editorial published in the Sunday newspapers called for a courageous response to the crisis (EurActiv 02/06/09). Swedish Finance Minster Anders Borg also called for the bonus culture to come to an end in Pittsburgh (EurActiv 03/09/09). Brown is the only leader to foster some reservations, in particular regarding France's proposals for a mandatory bonus cap.
In spite of efforts by the London mayor, Boris Johnson, and other industry lobby groups to halt a directive to regulate alternative investment funds (EurActiv 03/09/09), the newly-appointed European Parliament rapporteur for the directive, MEP Jean-Paul Gauzès, upped the ante and said yesterday (3 September) he would extend the directive's reach beyond managers to include funds too.
