Steinbrueck says UK, U.S. finance sectors resisting reform
The City of London is doing its best to block the introduction of stricter financial market regulations but tougher rules will come, German Finance Minister Peer Steinbrueck said a day before a Group of 20 summit.
Steinbrueck told Germany's Stern magazine he hoped new rules on bankers' bonuses could be agreed at the summit in Pittsburgh on Thursday and Friday.
But he added that the financial services sectors in Britain and the United States were resisting stricter regulations.
"There is clearly a lobby in London that wants to defend its competitive advantage tooth and nail," Steinbrueck told Stern in the interview released on Wednesday.
"In the United States, too, the financial industry is evidently putting a lot of pressure on Congress with the message: 'don't take things too seriously with regulation'," he added.
Steinbrueck said Britain was having an especially hard time, "to put it politely", agreeing to tougher regulation of hedge funds.
A spokesman for the British Treasury said Britain had led international efforts to "end the risky pay and bonus culture in the global banking industry".
"Our proposals for clawback and deferral of bonuses in addition to much greater transparency have become the international blueprint for reform," the spokesman said.
"We will continue to work with other nations — including our G20 partners in Pittsburgh this week — to make sure pay policies are structured in the long-term interests of financial stability," he added.
Steinbrueck has criticised Britain before on the issue of regulation. In July, he accused the British government of hindering efforts to reform global financial markets because it is too eager to pander to the City of London.
However, he told Stern: "I am sure: we will make lasting changes to the rules of play for the financial markets."
"At the G20 meeting in Pittsburgh we will hopefully get a rule whereby bonuses will be limited to a proportion of fixed salaries," he added.
Steinbrueck took aim at the banking sector, saying it would have to share the costs of the global financial crisis.
"The initiators of the crisis — and the financial sector is foremost among them — must contribute to the costs being shared fairly," he said.
He also singled out former U.S. Federal Reserve Chairman Alan Greenspan, who he said led a movement for "unleashed" financial markets: "His philosophy, which was copied by many, is jointly responsible for the crisis.
Banks could not be pushed now to set aside more capital to cover their risks.
"We only can do that after the crisis, because otherwise we would further burden banks," Steinbrueck said.
