PARIS — How far to go in limiting bankers’ bonuses looms as one of the toughest issues at this week’s Group of 20 summit of world leaders in Pittsburgh, with clear differences between the United States and Europe despite recent moves in each other’s direction.
The European push, led by the French, for concrete bonus curbs appeared to have found some response in the U.S. when the Federal Reserve said Friday it wanted an oversight role that would let it review compensation policies. But those proposals — which may have the backing of the White House — fall short of many European demands.
Arguing that bonus incentives encourage bankers to take excessive risks, France and Germany are urging strict limits on pay. French President Nicolas Sarkozy has even threatened to walk out of the summit if he doesn’t get his way.
U.S. and British leaders envision something looser, echoing some of the tough talk of European leaders but veering away from regulation that might scare away talent — and lucrative economic activity — from their financial centers on Wall Street and in London. The Associated Press
