International Community Attacks Financial Industry

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Thursday evening’s G20 agreement concluded with a nine page communiqué which called for, in many ways, a complete overhaul of the financial regulatory institution — including starting an international crackdown on financial institution salaries.

A new set of international rules will limit the cash bonuses provided to traders and executives who are making “risky decisions.” The regulatory body will assess how much risk these individuals are taking, and those deemed to be in the “risky” majority will be limited to payment in sale-restricted shares; a move which will limit the return a banker can get from making short-term profitable, but long-term faulty decisions.

The plan calls for an international body to be established which would be chartered with flagging and identifying potential economic and financial problems before they occurred.

As expected, British Prime Minister Gordon Brown said Thursday that the G20 would publish a list of non-compliant tax havens imposing what he calls “tough sanctions” on those who do not comply with the legislation agreed upon by the G20 or the Organization for Economic Co-operation and Development.

“The banking secrecy of the past must come to an end,” said Brown, referring specifically to those countries like Switzerland, who have historically ensured secrecy to the extent of harbouring tax criminals

Nicolas Sarkozy, President of France, praised the conclusions from the G20 summit, saying that they were “more than we could have hoped for.”

Canadian Prime Minister Stephen Harper also praised the regulation and tax haven crackdown saying that the new system is “very complete and very strong.”

“This really is unprecedented, coordinated and fast action by the international community to an economic crisis, frankly at a speed and a level of engagement we have never seen in the past,” concluded Harper. “This is quite a significant achievement, and I do believe markets should take considerable comfort from this action. Obviously we’re not out of the woods, but there is a very strong will on the part of all major nations to act on this and to coordinate those actions.”

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