US prepared to accept regulatory 'differences'

18 November 2010

The US Treasury has revealed that it does not intend to introduce additional rules relating to bankers' pay and acknowledged that it is unlikely different countries will be able to agree on one global regulatory framework.

Speaking to the Financial Times, deputy Treasury secretary Neal Wolin insisted that governments are broadly in agreement on many topics relating to financial legislation, but suggested that America is not looking to clamp down on salaries.

"Countries will always make specific judgments," he told the newspaper. "The question is, do we have a level playing field across the regime even if there are differences on specific issues?"

Mr Wolin expressed his belief that banking remuneration should be "market-based" and questioned the wisdom of implementing further regulation in the wake of the controversial Dodd-Frank law passed earlier in the year.

However, he dismissed suggestions from some figures in the financial sector that the implementation of the new restrictions should be staggered or delayed to allow companies to adjust to them and reiterated his country's commitment to Basel III.

Deutsche Bank chief executive Josef Ackermann warned of the potential pitfalls of imposing stricter guidelines on performance-related banking payouts in remarks prepared for a speech in Brussels, claiming they could damage the EU's "reputation" among finance firms.

According to Reuters, Mr Ackermann noted that the trading bloc has already adopted a "distinctly more rigorous approach" than other authorities and implied that the G20 nations have struggled to reach a consensus due to domestic pressures.

His comments came after the Daily Telegraph reported that research carried out by UBS found that the investment banking arm of London-based firm Barclays would never have made a profit if the Basel rules had already been in place.

Following analysis of Barclays Capital's results over the last ten years, UBS declared that it would have posted losses in each year of its existence - including a £3 billion ($4.79 billion) shortfall in 2007 - under the terms of the legislative package.

By Claire Archer

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