French banks in favour of new bonus system

French banks have given their backing to a reform of their bonus structure, following widespread concern over the current system.

With the new system, bankers could suffer financial penalties if their investment decisions are loss-making.

The new system for compensation was agreed following a meeting with the country's banking leaders and Mr Sarkozy.

French president Nicolas Sarkozy believes tougher rules on pay within the banking and financial services sector should be introduced across all G20 states.

He has said he will press for tougher controls on bankers' bonuses at the G20 summit in Pittsburgh next month.

The bonus culture present within the industry has caused some public disquiet, particularly because of the perceived role the sector played in the current financial crisis.

However, the British Bankers' Association has argued that restrictions on bonuses for people in London banking jobs could affect the capital's position as a major financial hub.

Updated: 25 September 2009.
Categories: banking-and-financial-services, international, market-and-industry-news.