Swiss banks say they welcome in principle proposals by the Financial Market Authority (Finma) that would limit bonus payments.This content was published on August 14, 2009 - 16:12
The new policies from Finma, the banking supervisory authority, stipulate that bonuses should be sustainable and linked to a long-term focus on profits. Boards of directors, who create remuneration policies, will also be held more accountable.
The measures will enter into force on January 1, 2010.
The move has already gained the support of political parties and employee associations, although the Swiss Bankers Association said that while it supported the principle of bank bonus supervision, it cautioned against measures that would risk entrepreneurial freedom.
Restrictions on pay could hinder the ability of Swiss banks to attract top talent, critics warn. The Swiss Business Federation, economiesuisse, has questioned whether in instituting the measures, Finma has waded outside its legal authority.
The Swiss Bank Staff Association said the measures were a step in the right direction but wants compensation committees to include people outside the boardroom. It has called for more wage transparency and for the creation of external controls.
Switzerland's political parties have generally praised the proposals although they are critical of some details. The centre-right Radical Party has called the moves tough but thorough. The Christian Democrats also expressed interest in limiting bonuses but says it not opposed to them.
The rightwing Swiss People's Party welcomes Finma's adoption of bonus controls but said the problem of credit risk – separating investment banking and private banking – was not addressed. It said the regulations were too burdensome on small and medium-sized banks.
The centre-left Social Democratic Party and the leftwing Greens have not taken a stand on the issue.
swissinfo.ch and agencies
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