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Obama wants world economy reshape at G20
(Agencies)
Updated: 2009-09-21 21:21

Europe presses on bonuses

European officials renewed calls on the summit to curb bonuses paid to bankers. Massive payouts linked to risky investments are widely seen as a factor in the credit crisis.

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German Finance Minister Peer Steinbrueck said he supported a Dutch proposal to limit banking executives' bonuses to the level of their fixed annual salary, the kind of idea that US officials, mindful of Wall Street's concerns, oppose.

German Chancellor Angela Merkel, who is seeking re-election next weekend, said on Saturday she was "thoroughly optimistic" that a deal could be done on reforming financial markets.

French President Nicolas Sarkozy has tempered his calls for bonus caps, possibly paving the way for a G20 deal tying payouts to bankers' long-term performance, not quick bets.

Steinbrueck, a member of the center-left Social Democrats, said he would press G20 countries to examine the idea of a global tax on financial transactions to curb excesses.

A US draft of the summit communique did not mention this plan, German magazine Der Spiegel said. But G20 sources said the idea would be discussed by leaders.

The European Union should impose limits on bankers' bonuses even if the United States does not, European Commission President Jose Manuel Barroso said on Sunday.

The United States is keen to show Europe that it is taking steps to rein in excesses in financial markets.

But the pace of US regulatory reform has been slow, hindered by opposition from a powerful banking lobby and the Obama administration's focus on healthcare reform.

Those delays could get longer still because the Senate's top legislator on financial regulation favors a more radical streamlining of bank supervisory agencies than the changes proposed by Obama.

The G20 leaders are due to discuss other issues in Pittsburgh, including climate change ahead of important United Nations negotiations on emissions levels in December.

The EU's Barroso will warn on Monday that the talks "are dangerously close to deadlock at the moment ... and the world cannot afford such a disastrous outcome," according to excerpts of a speech he will make in New York.

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