For those bankers and other finance professionals looking to escape centrally dictated pay caps, cross Germany off the list of havens.
Bankers who take unjustifiable risks in business deals will be forced to repay their bonuses under new rules unveiled by German financial watchdog Bafin on Friday.
“Aggressive compensation systems, along with other factors, contributed to the financial crisis in that they set the wrong incentives,” Bafin said in a statement on changes it is making to its Minimum Requirements for Risk Management standards.
We would wonder aloud who rules on what is “unjustified,” but we suspect we already know the answer. Nothing exciting goes on in Germany anyway so… no big loss.
German watchdog takes aim at banker bonuses [Reuters]
In what has to be one of the most… creative campaign promises in quite a while, Germany’s Foreign Minister Frank-Walter Steinmeier unveils the “Deutschland Plan,” wherein he will eliminate unemployment by 2020. True, there are no specific term-limits attached to the position of Chancellor in Germany, but planning out to 2020 is an awfully optimistic reach.
Green jobs and health care are slated to create 4 million new jobs under the plan. Sound familiar?
Steinmeier ‘Deutschland Plan’ Pledges Full Employment [Bloomberg]
Old timers at Dealbreaker will remember with fondness the days when Volkswagen briefly became the largest company by market-cap in the world, and when it became clear to a much wider audience that Porsche made more money from their barbarian-like, hedge fund behavior* than that whole selling cars thing.
You might also remember that Porsche has been lusting, in the German sense, after Volkswagen, for a long time.
Now this:
Porsche Automobil Holding SE and Volkswagen AG, two of the storied names in Germany’s car-making history, said Wednesday they plan to merge their operations, creating an integrated auto giant with 10 independent brands, including Porsche’s coveted sports-car operations.
Following a meeting of Porsche’s owner families – Porsche and Piech – the company said in a statement that a task force is set to establish within the next four weeks the basis for a merged company.
Porsche said the families Wednesday discussed proposals laid out by Porsche’s and Volkswagen’s executive boards, which include capital measures, and agreed that an integrated car-manufacturing group should be forged.
A person familiar with the situation said the current plan includes a possible capital increase by around EUR5 billion to reduce Porsche’s debts, which fueled speculation about its financial situation in recent weeks.
“In the final structure, 10 brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured,” the Stuttgart-based auto maker said.
Porsche wants, Porsche gets. No? Well, not exactly. The line that seems to be coming out is that famous “mergers of equals” play. You know, like Daimler-Chrysler? But, now even Lower Saxony (which holds a veto right) looks ready to stand aside. The times they are a changing. We’ll see who is left standing.
* “To crush your financial enemies. See der capital driven before you. Hear the lamentations of dee regulatory relations women.”
Porsche, Volkswagen Seek To Merge Operations [The Wall Street Journal]
In the land where the words for “debt” and “guilt” are alarmingly similar, and the chancellor seems to be named for a pubic wig, are we surprised that silly proposals for financial regulation are a regular feature? Not really.
Germany will amend its constitution to ban excessive public borrowing and set up a strict repayment schedule for the public deficit caused by its latest fiscal stimuli, chancellor Angela Merkel said on Tuesday, underlining Berlin’s rising concern about the erosion of fiscal discipline in Europe.
The announcement came as Ms Merkel unveiled a two-year €49.25bn package of growth-boosting measures that, together with steps adopted late last year, will raise to 1.5 per cent of gross domestic product the amount the government plans to spend on fighting the economic crisis this year.
Yes, we are going to return Europe to fiscal discipline. (But not before I slip through this $70 billion spending package).
Germany to ban excessive borrowing [The Financial Times]
