Is more regulation the solution? Politicians across Europe and the US are discussing introducing sweeping changes to the way banks operate, including attemps to limit bankers remuneration packages and preparing regnlations to strengthen capital requirements (Basel III). Many in the finan- cial sector, however, fear that reforms could be counterproductive and limit banks ability to provide their customers with a complete range of services. In January, the then finance minister of the Netherlands, Wouter Bos, announced a new remuneration plan for the nationalised bank ABN AMRO. Bos said that ABN AMRO's remu neration poiicy will be "in line with current thought on sustain- able remuneration, and is a clear break with the past, while still standing in proper relation to relevant job markets." The changes introduced by Bos means remuneration at ABN AMRO is more tightly linked to performance, and bonuses will only be paid if managers perform above expectations. Bos was also a firm supporter of the Banking Code introduced by the Dutch Bankers' Association on 1 January 2010. Designed primarily to engage banks to redesign their remuneration poiicy and shore up corporate governance, the code also aims to realign banks' responsibility towards their stakeholders, such as their customers, shareholders and employees. Cover ing governance, risk management, audit, and remuneration within banks in the Netherlands, the code recommends that supervisory board members have appropriate experience within the financial sector, as well as thorough knowledge of the interests of all parties involved in the bank. Some politicians, meanwhile, are looking at the issue from a different perspective. In 2008, President Nicolas Sarkozy of France established the Commission on the Measurement of Economie Performance and Social Progress. Chaired by Nobel prize-winning economist Joseph Stiglitz, the commission was established to look at the economy from a quality of life and a sustainability angle, as well as the traditional growth model. In a 2009 report, Mr Stiglitz and fellow Nobel prize-winning economist Amartya Sen recommended that countries begin assessing the economy using a model that factors in human welfare issues, rather than simply economie growth, taking into consideration the impact of issues such as unemployment and environmental degradation. In the United States, President Barack Obama has called for a separation of investment and wholesale banking from retail and commercial operations, in a bid to protect consumers from the fall out of potentially risky banking practices. At the Euro- pean level, meanwhile, the head of the European Central Bank, Jean-Claude Trichet, has said that he believes any reforms should ensure that the banking sector focuses on financing the real economy, which he notes is its key role. Recent atten- tion, however, has concentrated on the more pressing issue of ensuring each of the European Unions' euro zone countries is financially stable. What seems apparent, though, is that there is still little consensus on how the new financial landscape should eventually be shaped. There is no doubt, however, that capital requirements will be further strengthened. Obviously, Rabobank is already preparing for these developments. ISSUE 23 MAY 2010 RI WORLD 17

Rabobank Bronnenarchief

blad 'RI World' (EN) | 2010 | | pagina 17