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G20 announce overhaul of financial remuneration packages

The G20 would appear to have gone to war on banks around the world, whom many of them blame for the ongoing worldwide recession. The Financial Stability Forum (FSF) is likely to be given the job of overseeing worldwide financial markets and ensuring that regulations are in order, risks are reduced and long and short-term executive pay is linked to long-term performance.

As the UK government suggested some weeks ago, it would appear that the worldwide financial sector could come under greater regulatory scrutiny in the short, medium and longer term. While it would be wrong to suggest we have seen the end of multibillion pound bank bonuses, it looks as though they will now have to work harder for their money.

There is also a suggestion that banks around the world will be made to retain higher levels of liquidity and capital strength in the good times and bad times. Unlike the UK government, who many suggest should have saved more in the good times, it would appear less money will be paid out to shareholders and more retained on the balance sheet.

However, there are concerns that a tightening of the regulatory environment could impact upon the free market around the world which has been at the heart of worldwide economic growth for many decades.

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