Due to the given financial crisis governments worldwide are busy to bundle up “care packages”. Oversimplifying a bit one can describe the current scenario as follows: <\/p>\n
Banks lost trust among themselves, therefore they tend to cease lending out money, therefore capital flow is in danger, therefore economy is in danger. Hence governments put guarantees, buy up problematic assets etc., which in the turn buffer the risk for the banks, so that the banks will again have more confidence into themselves.<\/em><\/p>\n This would be funny if it wouldn’t be funny at all. In particular the german government will issue a “stabilization law”, which is intended to be pushed through by the end of the week and which I find hard to accept. Why? <\/p>\n Lets first put together the main points of this law<\/a>: -the german government provides a fund with a volume of 500 billion Euros (operated by the ministry of finance and administered by Deutsche Bank) , with which “measurements” such as recapitalization (which means more or less bying parts of banks\/sharevalues\/etc.)(80 billion Euro) and putting guarantees (400 billion Euro + 20 billion security reserve) can be taken.<\/p>\n In exchange for this public donation one can read today on the webpage<\/a> of the ministry of finance that:<\/p>\n Der Bundesregierung ist wichtig, dass Manager harte Auflagen in Kauf nehmen m\u00fcssen, wenn sie unter diesen Absicherungsschirm wollen. Neben der angemessen Verg\u00fctung f\u00fcr die Hilfen wird es f\u00fcr jedes Unternehmen, das Unterst\u00fctzung braucht:<\/p>\n * eine H\u00f6chstgrenze f\u00fcr Vorstandsbez\u00fcge von 500.000 Euro geben m\u00fcssen (translation without guarantee) *there exists an upper limit of 500000 Euro for remuneration of members of the management In their draft<\/a> for the new law these obligations are not mentioned explicitly, but it is written (\u00a7 10) that the obligations which have to be complied with (zu erf\u00fcllenden Anforderungen) can be later on specified in socalled Rechtsverordnungen.<\/p>\n The above described help package of the german government is valid until Dec. 31. 2009.<\/p>\n Among others (i have not really time for going into detail) it is the term “zu erf\u00fcllende Anforderungen” (demands which have to be complied with). Given that I understood correctly –<\/p>\n Given this is true, I find that quite unacceptable. <\/p>\n Or in other words: <\/p>\n It is fairly obvious that a big part of the current disaster is due to –yes one should call what it is — “profitable and riskless gambling with the ressources of others”. In other words most of the current remuneration systems reward those who are successfully pushing the limits without (almost) any personal consequences. In particular it does not reward those, who may step back e.g. for moral<\/a> and other reasons.<\/p>\n
\n<\/strong><\/p>\n
\n (english handout<\/a>): <\/p>\n
\n * einen Verzicht auf Bonuszahlungen geben m\u00fcssen
\n * einen Verzicht auf Dividendenaussch\u00fcttungen geben m\u00fcssen.\n<\/p><\/blockquote>\n
\nIt is important for the german government that managers have to accept firm obligations, if they want to be eligible for safeguarding measurements. Besides an adequate compensation for the help it will be necessary to demand for each corporation, which is in need that<\/p>\n
\n *a disclaimer for bonuses
\n *a disclaimer for dividends
\n<\/em><\/p>\n