German Finance Minister Wolfgang Schaeuble wants to pass a law to limit excessive bonus payments for bankers, a newspaper reported on Saturday. The Frankfurter Allgemeine Zeitung said the draft law it had seen would give financial watchdog Bafin the power to prohibit bonuses or limit them at banks that do not fulfil capital or liquidity requirements, or are at risk of not doing so.
A Finance Ministry spokesman confirmed that a draft law existed on the issue of banker bonuses, aimed at implementing the standards of the Financial Stability Board (FSB). He declined to comment on details of the draft. The FSB has been tasked by the G20 economic powers to make sure that a wide range of new financial regulation is applied consistently across the world so that countries do not try to take advantage.
The G20 in September endorsed principles proposed by the FSB devised to stop bonus schemes in banks from encouraging too much short-term risk taking. It is due to report in March on how the principles have been applied. A German Finance Ministry spokesman said on Friday Germany was not planning a special charge for banks, after US President Barack Obama on Thursday proposed a fee for Wall Street banks to reimburse taxpayers for bailing them out.
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