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German banker sees no defense of industry bonuses

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The head of Germany’s second-largest bank said huge financial-industry bonuses have gone “absolutely out of bounds,” and called on other major banks to slash the payments.

Commerzbank Chairman Klaus-Peter Mueller told Bloomberg News in an interview that massive bonuses were “almost a kind of betrayal on shareholders. It is simply impossible that you give up to 50% of earnings on businesses into bonus pools.”

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On a day when chiefs of four major U.S. banks were in Washington trying to defend their companies’ conduct leading up to the financial crisis, the 65-year-old Mueller scoffed at the industry argument that changes in traditional bank bonus payouts would lead to a brain-drain from the companies.

“If the 15 largest investment banks of the world said we’ll put an end to this, where would [employees] go?” he told Bloomberg. “How many hedge funds out on the Street are silly enough to pay $10 million, $15 million or $20 million to people who they know they could probably get two months later for $3 million or $4 million?”

-- Tom Petruno

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