Traders Targeted In Another New Bonus Tax

Hand over Money

Reuters reports that France has singled out traders for a one-off 50% tax on bonuses paid out in 2010 above $39,000.

The move differs significantly from the UK's bonus tax, in that it tries to penalize those who were seen as responsible for the financial crisis. The new tax will apply to French institutions and foreign-owned firms located in France.

One banker told Here Is The City: 'This is a more sober response, and will be seen by many as hitting at the most appropriate targets. Whether it will result in firms quitting for countries with more certain tax regimes, however, remains to be seen'.

In the meantime, UK City Minister, Lord Myners, doubtless trying to ensure that firms remain and do business in London, confirmed Wednesday that the bank bonus tax is a one-off. Myners said: 'From the engagement I have had with the banking industry, I am fairly clear that it's not going to be required to extend it further'. Another banker told us: 'Sure, it's a one-off - but only because there won't be many bankers working in London in 12 months time!'.

And The Guardian reports that Conservative MP Michael Fallon has stepped down as Chairman of the Compensation Committee over at broker Tullett Prebon, after the firm confirmed that it will provide financial assistance to employees who wish to outside the UK to avoid penal taxation.

Bloomberg reports that Commerzbank's new compensation guidelines enables the bank to withhold bonuses from its management board, and that the bank said that it may cap executive pay next year.

The news agency also reports that a bankruptcy court judge has approved a plan to pay $50m in bonuses to 230 derivatives employees at Lehman Brothers Holdings. The employees are said to have settled 17% of all derivatives contracts, bringing in some $8bn in cash.

Finally, The New York Times reports that New York State's comptroller Thomas DiNapoli has said that he estimates that the bonus pool for employees based in the City is expected to come in higher than the $18.4bn paid-out in 2008, saying that profits at the firms for the first 9 months of 2009 came in at a record $49.7bn.

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