EU leaders agree on bankers' bonus deal

Leaders in the European Union (EU) have come to an agreement over bankers’ bonuses.

Throughout meetings in Brussels, the politicians decided to work towards a global concord that would seek to significantly reduce or completely cancel the incentives used by institutions, including private banks.

A deal will be struck at the G20 summit in Pittsburgh this week, according to reports.

New legislation is expected to be created that uses the threat of sanctions in order to force banks into providing bonuses for long-term achievements only, so as to prevent short-term financial risk-taking.

Although Gordon Brown said there would be no toleration of a return to business as usual, the US and UK have rejected some leaders’ calls for a mandatory cap on incentives.

A joint statement read: ’The G20 should commit to agreeing to binding rules for financial institutions on variable remunerations backed up by the threat of sanctions at the national level.’

This comes as US president Barak Obama commemorated the anniversary of the Lehman Brothers collapse by offering a warning to bankers.

He said there would not be a return to reckless behaviour and complacency and asked for the support of Wall Street in creating financial reform.
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