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15/10/2008
Government Target Top Banker Bonuses
Ireland's banking elite could have a - relatively - lean Christmas ahead as details emerge of plans to limit their previously lavish bonus scheme.
Bank bosses across Europe and even the US are facing an end to the good old days of multi-million golden handshakes and 'performance' based bonuses.
Now the Irish Government is following suit and are set to impose limits on the bonuses available to top bankers as part of the deposit guarantee scheme.
The bank bonus scheme has been credited with encouraging the short-term high-risk ventures taken by banks, resulting in the overvaluation of their assets, as bank chiefs benefited handsomely from garnering inflated short-term gains.
Alternatives being considered in other countries are the introduction of bonuses in the form of shares in the top executive's own bank, to engender a long-term strategy being taken at the highest level.
Details of some of the new scheme are due to be published on Wednesday afternoon, following its approval by the European Commission last week.
Controls will also be put in place to prevent banks from lending recklessly while they are covered by the guarantee.
(DW)
Bank bosses across Europe and even the US are facing an end to the good old days of multi-million golden handshakes and 'performance' based bonuses.
Now the Irish Government is following suit and are set to impose limits on the bonuses available to top bankers as part of the deposit guarantee scheme.
The bank bonus scheme has been credited with encouraging the short-term high-risk ventures taken by banks, resulting in the overvaluation of their assets, as bank chiefs benefited handsomely from garnering inflated short-term gains.
Alternatives being considered in other countries are the introduction of bonuses in the form of shares in the top executive's own bank, to engender a long-term strategy being taken at the highest level.
Details of some of the new scheme are due to be published on Wednesday afternoon, following its approval by the European Commission last week.
Controls will also be put in place to prevent banks from lending recklessly while they are covered by the guarantee.
(DW)
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