Parliament supports SP proposal for total ban on bonuses at state-supported banks

11 October 2011

Parliament supports SP proposal for total ban on bonuses at state-supported banks

A ban on bonuses paid out by banks which the state is called upon to support financially must not only apply to executive staff, but also to all other bankers. A majority of MPs this afternoon supported a proposal to this effect from SP Member of Parliament Ewout Irrgang. ‘When you support a bank using taxpayers’ money,’ says Irrgang, ‘the aim is not to allow the bank to carry on dishing out bonuses. This proposal means that a ban can be imposed whenever it becomes necessary to aid a bank financially.’

Ewout IrrgangDuring the ‘General Financial Considerations’ – the formal title given to the series of debates which follows the annual budget – the government announced a measure to ban bonuses for executives of financial institutions receiving financial aid from the state. If in the short term such aid for Dutch banks becomes necessary, even before the new law is in force, the government wants moreover to apply it retrospectively. Referring to the measure, which the last Finance Minister had not dared to put forward, Irrgang describes it is ‘a step in the right direction’ but adds that ‘excessive bonuses are not only given to executives of banks. Bankers who aren’t in the executive class regularly receive such bonuses. Yet the law as announced says nothing about bonuses for traders employed by banks. If we have learnt anything at all from the crisis, it’s that traders, driven by bonuses, will take huge risks.

Irrgang concludes, therefore, that Finance Minister Jan Kees de Jager will incorporate the resolution carried today by Parliament into the law currently in preparation.

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