BNP Paribas bonuses spark anger in France

6th August 2009, Comments 0 comments

The French bank expects to pay out over EUR 1 billion in bonus payments to its investment banking division.

Paris – French bank BNP Paribas said Wednesday it expected to pay out over EUR 1 billion in bonus payments to traders, executives and some 17,000 staff in its investment banking divisions this year.
A spokesman told AFP that an average of EUR 59,000 per person was being anticipated, but he said that the bank would "scrupulously respect" guidelines agreed by Group of 20 major economies in April.

The scale of the bonuses sparked anger in France when revealed by the left-wing Liberation daily newspaper, with Socialist opposition leader Martine Aubry issuing a statement that termed the amount "a veritable scandal".

Industry Minister Christian Estrosi told French radio that France's central bank will "supervise" the payments in the interests of "transparency and guarantees" that rules drawn up by political leaders in London are adhered to.

But the bank said it had to offer renewed bonuses and was "worried that many of our rivals, notably in the United States, are no longer applying the rules".

The spokesman said G20 leaders did not suppress bonus payments, but agreed to clamp down on guaranteed bonuses over multiple calendar or financial years, or their calculation on net earnings after write-downs on risk.

The return of the big bonus culture for top banking executives will trigger new "dramas" in the financial sector if tougher regulation is not applied, International Monetary Fund chief Dominique Strauss-Kahn said in July.

"I am appalled at what I see," the Fund's managing director said in reference to multi-billion-dollar bonus provisions set aside at the likes of Wall Street's Goldman Sachs and top London firms.

French banking rival Societe Generale, which was nearly made insolvent in 2008 by huge exposure on trading positions associated with trader Jerome Kerviel, said Wednesday it would heed the lessons of that experience.

"When we come to evaluate remunerations, we will take into account not only results, but also behaviour," said chief executive Frederic Oudea.

"We will take into account (acceptable) parameters as much as risk," he added.

AFP / Expatica

0 Comments To This Article