Dutch adopt new bank bonus rules

There has been discussion of bankers' bonuses around the world

Dutch banks have adopted a new code of conduct, which will include capping bonuses and making sure they can be clawed back in the future.

Dutch Finance Minister Wouter Bos welcomed the voluntary code and said that it would be enacted into law.

He added that the rest of the world should use the rules as a model for their own banking sectors.

Executive bonuses will be capped at 100% of salary and redundancy pay will be limited to one year's salary.

'Integrity and care'

The code of conduct was adopted by the Netherlands Bankers' Association (NVB) and will apply to all bankers based in the Netherlands from 1 January 2010.

All members of banks' executive boards will have to sign a declaration on moral and ethical conduct, including a promise to "perform my duties as a banker with integrity and care".

The Dutch government was among those that pumped billions of euros into their banks.

It nationalised the Dutch assets of Fortis Bank.

There has been much discussion, including among G20 ministers, of whether bonus structures encouraged bankers to take excessive risks, bringing about the banking crisis.

Mr Bos said he planned to take the new rules to the G20 summit in Pittsburgh later this month as an example of what could be done.

Bonus disagreements

French banks have already agreed to bring in a new system of performance-related pay, amid pressure to curb excesses.

Its banking federation said there would be penalties for those who lost money, as well as rewards for success.

In the UK, a new code coming into effect next year will say that bonuses should not be guaranteed for more than a year and that they should be spread over three years.

But it is unclear whether the UK government favours a cap on bonuses, with Chancellor Alistair Darling saying that would need global agreement, while Prime Minister Gordon Brown says that ways of limiting bonuses must be explored.

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