The Netherlands wants to introduce legislation that will cap bankers’ bonuses at 20% of their annual salary, a move that could lead to Dutch bankers facing one of the most stringent pay curbs in Europe amid public anger about compensation. Dutch Finance Minister Jeroen Dijsselbloem said Tuesday that the bonus cap should help curtail excessive risk-taking and avoid future taxpayer bailouts. Banks will also be forced to limit severance pay and claw back bonuses when employees have violated professional standards or are responsible for hefty losses, he said in a letter sent to Dutch parliament. The proposal goes a step further than in many other European countries, where policy makers are scrambling to address ongoing public criticism over generous corporate pay packages, especially for bankers. Mr. Dijsselbloem said the EU rules “don’t go far enough” and that he wants to introduce legislation to establish the “strictest bonus policy in Europe.” The new rules are planned to come into effect Jan. 1 2015, and still require parliamentary approval. They will apply to all employees in the Dutch financial sector, including those working for foreign branches of Netherlands-based banks and insurers. [WSJ]
SEC Proposes New Rule That Would Make Companies Disclose The Fact That CEO’s Make More In An Hour Than Rank And File Employees Make In 7 LifetimesBy Bess Levin
U.S. regulators proposed new rules Wednesday that would require public companies to disclose the pay gap between chief executives and rank-and-file employees, a controversial requirement that thrusts executive compensation into the spotlight. A divided Securities and Exchange Commission voted 3-to-2 to float a less onerous measure than what the SEC was ordered to adopt in the 2010 Dodd-Frank financial law, giving companies flexibility in how they calculate the ratio to cut back on its expected costs. [WSJ]
“Straddle over a Japanese-style toilet every day.” Read more »
Got to give it up for Volcker, who, despite growing uproar against his proposed eponymous rule, is soldiering on, saying it’s the best thing that ever happened since well, ever. Volcker is however getting increasingly frustrated and said he is “very disturbed” by the level of dysfunction in Capitol Hill and the Senate, and basically, WTF is going on with these people who can’t get things done?
In a CNN interview yesterday, Volcker said that regulators screw up big time in the years leading to the crisis, as a) they weren’t “on top” of anything and b) they didn’t understand what was going on anyway, relying on “somebody down in the bowels had it under control.” Also financial innovation sucks. The only innovation that has added value recently, is the ATM machine.
The Volcker Rule is not gaining popularity, with many people distancing themselves from the proposal- with Senator Dodd most recently saying the thing’s a bad idea. A source close to the matter tells us that now, chances for it to be enacted are getting very slim and that even Barney Frank is sort of, “not enthused” with it either. According to the source, Frank’s beef is that he doesn’t understand why the White House is making such a push, as regulators would have the authority to implement the proposed changes, and he’s questioning the necessity for Congress to revisit it. “It was s political move in the sense that the more you band against big banks, the more you help yourself politically. But they miscalculated on that one, ’cause it wont be beneficial for them in the end.”
SheBair is oddly pulling a Geithner, flip flopping around the prop trading ban proposal. Just like her nemesis, she’s adopting a “yeah, it’s a great idea but I don’t know” attitude toward Obama’s proposal.
At Wednesday’s AIG hearing, Congressman McHenry asked Timmy G. how he could back the Volcker Rule while having said that he was opposing a Glass-Steagall return, screaming at him: “How do you reconcile those two beliefs? They are direct opposites”