Page last updated at 11:51 GMT, Friday, 7 August 2009 12:51 UK

France targets bankers' bonuses

Societe Generale sign
Societe Generale is involved in an insider trading probe

The controversy over bank bonuses in France has escalated, with French President Nicolas Sarkozy calling on banks to disclose their bonus policies.

Mr Sarkozy has told banks to report to him on the bonuses at a meeting on 25 August and to update him on whether they have boosted credit as promised.

In April, G20 leaders pledged to apply tough new policies on compensation.

Concerns over lack of transparency at banks follow news of an insider trading inquiry into Societe Generale.

Senior executive Jean-Pierre Mustier and non-executive director Robert Day, who are the subject of the inquiry, reject allegations of wrongdoing.

Mr Mustier led Societe Generale's corporate and investment banking division where trader Jerome Kerviel worked - the rogue trader at the bank whose transactions cost the bank 4.9bn euros.

He stepped down on Thursday after it emerged that he was under investigation by France's Financial Markets Authority (AMF). It is unknown whether Mr Day will also leave the firm.

The bank was not available for comment.

Firm rules

Bonuses have been a source of contention, not just in France, but also in other European nations and the US.

There has been public disquiet that leading banks - which have been seen as a major cause of the financial crisis - have been receiving taxpayer funds, but are not prepared to change their traditional culture of awarding big bonuses to key staff.

Those concerns were highlighted again this week as banks published their latest results, with many posting solid profits. BNP Paribas, for example, put 1bn euros ($1.44 billion) aside for potential bonus payments.

Mr Sarkozy said rules agreed at the G20 summit should be applied "firmly".

On Friday, the French president's office said: "The president wants to make sure that French banks are following the rules agreed at the London G20, particularly in terms of remuneration."

The US House of Representatives recently voted in favour of laws to stop banks paying bonuses that promote excessive risk-taking.

The vote came after a report suggested that Wall Street banks that were bailed out by the government gave executives bonuses regardless of performance.

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