Anthony Sages Responds to New Global Banking Rules

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The Financial Stability Board (FSB) is making efforts to regulate international banker pay to reduce excessive risk-taking among key banking professionals. Global finance expert, Anthony Sages, notes that these curbs are very difficult to implement, but that the intentions are sound.

Bloomberg recently released a new article detailing the efforts of the Financial Stability Board to establish banker pay curbs to regulate bonus payments among banks across the several countries. The response has been varied, and the article only points to a few countries for making considerable efforts to abide by these new rules. Other countries are not as willing to cut bonus pay for several reasons. Anthony Sages, a financial expert who has worked with several top companies across the globe, understands that it is very difficult to communicate one idea across different nations, cultures and languages, but hopes that each country will see the necessity imbedded in these initiatives.

In a report developed for a G-20 meeting, the FSB explained, “Member jurisdictions have made different choices regarding the institutions and employees that are covered.” Many countries and companies are causing a “wide variation” in what bank employees will be affected by these curbs. For example, Barclay PCL CEO, Robert Diamond agreed to surrender 11 percent of his earnings only until bank profits increase. Going in a different direction, Australian banks are taking a much more aggressive approach. The article states that the country applies curbs to any employee “whose actions might ‘affect the financial soundness of the institution’ and whose pay is significantly performance-linked.”

Anthony Sages has worked in global finance and notes, “Even on smaller matters it is very difficult to get separate countries to agree on policy.” He comments on the FSB operation, “The Financial Stability Board does have every country’s best interest in mind, however there may be too much freedom in the flexibility of how banks and nations go about responding to the established curbs.” Sages fears that continued disarray could escalate to further problems regarding the policy’s implementation.

Other officials have expressed additional concerns regarding these new rules by stating fear that banks will lose key personnel as a result. Spanish regulators have even reported salary boosts as a way to make up for the cuts set forth by bonus curbs. Regardless, the FSB is still trying to find a collective understanding on the matter. However, Richard Reid, research director for the International Centre for Financial Regulation in London estimates “It is unlikely that we will reach a globally united front on this issue. Not all countries share the same enthusiasm for such curbs, indeed some may see this as an opportunity to attract top talent.”

Whatever the initial effects for banks turn out to be, Anthony Sages comments, “It is important for banks to realize that these plans do hurt and may cause initial loss on behalf of the institution. However, it is also essential for those officials to note that these moves are meant to establish a more secure future in finances for everyone.”

ABOUT:

Anthony Sages is a financial expert who has provided high-level advice to major companies who work in global finance. He has worked for international agencies and has a solid comprehension of the global scheme and relations behind policy-making and financial solutions. In addition to his 25 years of financial expertise, Anthony Sages has remained a continued supported of nonprofit groups and volunteer organizations including The United Way, ASPA, the Leadership Institute and the Financial Policy Council.

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