5 September 2009
World’s finance ministers meet at Guildhall
Finance Ministers from the G20 nations met last night, and again
this morning, to prepare for the leaders' summit in Pittsburgh at
the end of this month. The issue of remuneration within the
financial services industry, and in particular the size of bonus
payments, is likely to have dominated the agenda for debate.
The first part of the meeting took place at Guildhall, home of
the City of London Corporation, situated in the heart of the Square
Mile.
Stuart Fraser, Chairman of the Policy and Resources Committee at
the City of London Corporation, said: “It is imperative that we
restore public confidence in financial services; new and more
effective regulation is both necessary and inevitable.
“Today’s meeting, and the G20 summit in Pittsburgh, provide the
perfect opportunity for politicians from the world’s leading
economies to formulate a coherent set of regulatory objectives in
response to the current crisis.
“However, we must guard against any action that puts short-term
political considerations ahead of long-term financial stability and
the ability of the financial services industry to continue
promoting global trade and international development.”
Today’s meeting comes in a week when Gordon Brown, Nicolas
Sarkozy and Angela Merkel co-signed a letter to The Swedish Prime
Minister (Sweden currently holds the Presidency of the Council of
the EU) that called for the European Union to press for “binding
rules” to rein in bankers’ bonuses at the G20 Summit and described
certain banking practices as reprehensible.
Stuart Fraser commented:
“High pay does not necessarily mean high risk. Bonuses, when
used properly, are in no way reprehensible – they are a perfectly
legitimate means of rewarding good performance.
“Capping the bonuses of employees within private businesses that
do not constitute a systemic risk is a matter for shareholders, not
governments.
“The important debate, which must not be overshadowed by talk of
how much individuals should be allowed to earn, is how to construct
a regulatory system that allows financial institutions to operate
in a competitive, global marketplace whilst not exposing
themselves, their shareholders, or the financial system, to
unnecessary risks.
“However, I understand the public’s anger over bonuses and that
this is what the politicians have to take into account. At the end
of the day they need to understand that if no agreement can be
reached at the G20, we cannot act in isolation from the rest of the
world and expect the UK – and Europe - to remain at the forefront
of the global financial services industry.”
Ends
Press contact
James Abbott 020 7332 1754 / 07831 543 188
/ james.abbott@cityoflondon.gov.uk