France puts curbs on bankers' bonuses

PARIS

France's government issued new rules to banks Thursday to regulate how they award bonuses, including incentives to shun risky practices and short-term thinking.

The measures, hammered out amid the debate on bonuses that stemmed from the international financial crisis, were published in the government's Journal Officiel on Thursday, formally putting them into force.

They will force banks to spread out compensation over several years, reflecting long-term profits and cutting down on risky decision-making. At least half of the bonus will be withheld, to be paid over three years depending on performance.

Half of bonuses must come in the form of stock. Also, French banks cannot guarantee future bonuses more than a year in advance, Finance Minister Christine Lagarde said at a news conference.

French President Nicolas Sarkozy has led a global push for tighter international regulations and limits on bankers' pay.

France injected euro22 billion ($32.5 billion) into the country's six banks to keep them lending during the crisis.

The debate over the issue in France echoes public outrage in the United States, where banks have been criticized for paying out big bonuses while accepting taxpayer money.