Germany is unlikely to follow the UK example. Neither is the US, which will control bonuses only where banks have received state aid and not yet given it back. Bank bonuses remain a hot issue since the G20 tackled remuneration policies at global level.
The Financial Times is reporting that France will follow the UK decision on imposing a 50 per cent bonus tax. Germany, however, is unlikely to follow the UK example and neither is the US which will control bonuses only in cases where banks have received state aid and not yet given it back.
Angela Merkel, Germany’s Chancellor, said the UK’s idea of a windfall tax had ‘charm’ and would have salutary effects on bankers, but it appears unlikely that Germany will follow suit. Bundesbank President Axel Weber is opposed to a bonus tax, saying it would be more effective to align bonus payments to long-term performance.
Sarkozy had wanted to impose a bonus tax before, but feared that Paris might lose out to London. With the UK taking the lead, France is now in a position to follow suit.
The Obama administration is still basing its policy on a narrow definition of the bail-out, subjecting the handful of companies still relying on Tarp bail-out capital to tough pay constraints that do not apply to their peers.
© Financial Times
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