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G20 takes on bankers’ pay

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TEXT OF INTERVIEW

Bill Radke: Healing the global economy is the topic in London today, as finance officials from the G20 group of nations assemble. Joining us live is Andrew Hilton, Director of the Center for the Study of Financial Innovation in London. Good to talk with you again, Andrew.

Andrew Hilton: Good to be there.

Radke: What is this thorny issue that some European countries are pushing today about bankers deserve to get paid?

Hilton: Do you know, I don’t think bankers are very popular on either side of the Atlantic.

Radke: No.

Hilton: And they certainly aren’t popular in Europe. In Continental Europe, this is all considered a kind of Anglo-Saxon plot to enrich bankers at the expense of the real economy. So there’s gonna be a lot of political grandstanding, and there’ll be a lot of talk about bonuses, but it’s very hard to see really what they can do.

Radke: Our Treasury Secretary doesn’t seem to like that idea of tamping down bonuses.

Hilton: Well, I think it’s not just tamping down bonuses. There are two, there are a couple of things that they can do. One is they can probably agree on a sort of code of conduct when it comes to bonuses. The bonuses should be longer term, tied to the longer-term performance of the institution, perhaps with some sort of claw-back. And they should not be, let’s say, guaranteed, because the guaranteed bonuses are nonsense. I think they’ll probably agree on that, but it won’t really mean very much.

Radke: OK. Well, we’ve been hearing the recession might be ending globally. How much agreement is there on the health of the economy, you think?

Hilton: Well again, politicians have a vested interest in saying that everything is as good as it can possibly be, or at least getting better. I mean, economists themselves are split on this. There are some good signs, but there are a lot of people who believe — particularly in Britain, I think — that we could still face a double-dip recession.

Radke: That G20 meeting going on in London today. Andrew Hilton, Director of the Center for the Study of Financial Innovation there in London. Thank you.

Hilton: My pleasure.

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