President enters bank bonus row

THE president is expected to demand tighter limits on traders’ bonuses when he meets bank leaders tomorrow.

It is expected Sarkozy will call for limits such as setting ceilings or spreading bonuses over several years. However the banks are expected to argue they need to keep up with international practices – American bank Goldman Sachs has set aside 10 million euros for its traders this year.

The meeting will follow one today with Finance Minister Christine Lagarde who wants to stop the culture of a “mad rush” for bonuses.

At the start of the month BNP Paribas revealed they had put aside a billion euros for their traders’ annual bonuses. Sarkozy reacted angrily, reminding the bank of promises to act prudently that were made in the context of state bailouts for the financial crisis.

The governor of the Banque de France, Christian Noyer, said BNP Paribas was sticking to the spirit of what they agreed, but opposition parties and unions reacted with scepticism, including Green politician Daniel Cohn-Bendit who accused Mr Noyer of “incredible naivity.”