Clearly there are benefits to an EU-US coordinated program to bring the real world back to banker bonus payouts. If nothing else it would help limit any significant movement from one country to another. I'd be much less concerned about the banks moving beyond the US/EU as I don't see the customers wanting that nor would I see the bulk of the bankers wanting to resettle their families in less stable environments. The banks will make threats, most definitely, but a move to somewhere in the Middle East or Latin America is not feasible.
Even without such a coordinated effort though, something needs to give. Soon. The British Treasury is being pushed much harder to reform the system and may get that ahead of the US. The Independent:
Under the Treasury's plans, new laws would give the Financial Services Authority power to control bonuses at all British banks, not just at those institutions receiving state support.
But a spokesman for the BBA said: "The next move towards any potential legislation would have to be done at an international level, otherwise you run the risk of [investment] moving from one financial centre to another."
While there was scepticism about whether such a plan would come to fruition, it is understood the Government is serious about the measure.
Mr Darling's comments came in a weekend of fresh revelations about big bonuses in the City. Barclays Capital, the high street bank's investment banking arm, reportedly offered five investment bankers a bonus package worth a total of £30m. It also emerged that in the peak bonus season between December and April, British banks paid out £7.6bn in bonuses, although this was 40 per cent lower than the £13.2bn handed over last year.
