January 31st, 2012 • The PvdA (Labour Party) and the SP are urging a ban on bonuses for all banks and insurance companies in the Netherlands. In order to realize such a ban, the two parties will bring forward a legislative proposal.
Labour Member of Parliament Ronald Plasterk, commenting on the proposal, says: “Bonuses in the financial sector give the wrong performance incentives and set a bad example. At the same time, the bonuses are bad for the financial sector’s reputation. The financial sector has to a large extent a utility function. That was a reason to jump in during the banking crisis with tax moneys when things went awry, and then in the public interest to put a stop to wrongheaded incentives, such as the bonuses.”
The proposed act consists of the following elements:
This initiative goes further than the existing Code of Conduct for banks, the ‘Code Banken’:
SP Member of Parliament Ewout Irrgang says that “the proposal also goes further than the government’s legislative proposal shortly to be considered in Parliament for a ban on bonuses in banks enjoying state financial support. That proposal concerns exclusively bonuses for executives and applies only to the period that banks are receiving state support.”