The Dutch central bank is to ‘block’ bonuses from being paid out to top-level staff as long as the economic crisis continues, the Financieele Dagblad reports on Thursday.
All financial institutions, not just those which have had government cash, will be stopped from paying bonuses to board-level staff, the paper says.
The FD bases its claims on statements made by central bank president Nout Wellink at a parliamentary hearing on Thursday.
As long as the crisis continues, executives should not get performance-related bonuses, Wellink was reported as saying. He is investigating whether the below-board layer of management should face similar restrictions, the paper says.
Summoned for a chat
‘They have to be totally careful with their rewards for the very simple reason that we are in the middle of a crisis,’ Wellink warned.
The paper says all bank chairman will be summoned for a chat with the central bank head where his position will be made clear. ‘What Wellink says in such a conversation you must see as an order,’ said a former banker.
‘If we talk to people, we will impose our vision, not reach some sort of middle way,’ the paper quoted Wellink as saying.
The zero tolerance means Wellink is going further than the recent code of conduct agreed by banks, the paper points out.
Wellink told MPs everyone had waited too long to take action on bonuses. ‘Perhaps we could have reacted sooner as well. We have learned a serious lesson.’
Not all the papers agree that Wellink is to take action, however. The Volkskrant reports that the central bank boss told MPs they would have to introduce new legislation if they wanted to impose limits on bonuses.
The paper quoted Wellink as saying he could only intervene if the future of the bank was under threat.
Earlier, Hans Hoogervorst, head of the financial services sector watchdog AFM said excessive bonuses were partly the cause of the economic crisis. And while the most extreme bonuses were paid in the US and Britain, very large pay-outs were also made in the Netherlands, Hoogervorst was quoted as saying by news agency Bloomberg.
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