Bank-pay rules in Europe will hurt lenders in the region unless similar limits are imposed globally, a Societe Generale SA executive said today.
Michel Peretie, head of the corporate and investment banking unit at France’s second-biggest lender, said that European banks may not be able to attract and retain talent needed to succeed in the face of more stringent rules emerging from the financial crisis.
“Employees of banks have really borne the brunt of the crisis. I just want to keep the talent we have,” Peretie said at a conference hosted by France’s securities regulator in Paris. The rules “need to be consistently applied across the financial sector.”
The Committee of European Banking Supervisors will publish its guidelines on bonuses, limiting the cash portion to one- quarter of the total, in December. The European Union is implementing rules on bonuses as part of a range of measures to rein in the risk-taking blamed for causing the worst financial crisis since the Great Depression.
Europe “will not be able to wait forever for a global agreement,” said Jonathan Faull, director general of financial services at the European Commission, the 27-nation EU’s executive branch.
Lenders need to cut compensation and alter pay structures to takes to stem public anger at bankers’ income as public sector wages are frozen or cut, said Hans Hoogervorst, chairman of the Dutch financial markets regulator. “If the financial sector does not show more sensitivity to this, it will erupt in a political volcano.”
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