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Monday, February 9, 2009

France: Code of Ethics for Traders

France is to become the first country to limit bonuses for financial traders.

A new 'code of ethics' is aimed at curbing excessive payouts and overly-risky conduct.
It could come into force within a fortnight. The move comes a year after Paris-based trader Jerome Kerviel lost £3.5billion in illegal deals.

At one stage he was staking as much as £50billion on behalf of Societe General - more than the bank's net worth.

Under the agreement - between France's banks, its market watchdog and its treasury and banking authority - a bank's real financial health should be used to determined the size of any bonuses, rather than projections of future profits.

Although a new code would apply from this year, it would not affect traders' bonuses until the beginning of 2010.

French President Nicolas Sarkozy announced last week that there would be no 2009 bonuses at banks that have received state aid.

Read it here.

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