It seems somewhat ironic that the two nations with the most bankrupt financial systems are the ones leading the offensive against reform.
Attempts to clamp down on bankers' bonuses to prevent another global financial crisis were in disarray last night as Britain and America opposed proposals by other European Union nations.
France led calls for a cap on individual bonuses but Britain and America, while backing common rules to prevent excessive bonuses, argued that a "pay policy" would be unworkable. They suspect that bankers would find loopholes such as incorporating bonuses into pay.
Christine Lagarde, the French finance minister, said: "They [bankers] are active participants in the economy but they are not above the rules and they should have a real interest in making sure that what we went through (the crisis) does not happen again. As far as governments are concerned, their responsibility is not to the City. It is to the public."
Seven EU countries led by Sweden, which holds the EU's rotating presidency, urged the G20 to take tough action on "dangerous, indecent, cynical and unacceptable" rewards for bankers. They want a ban on bonuses guaranteed for more than a year, arguing that bonuses should instead be paid out over a number of years and should "mirror the individual's and the bank's actual performance over time".
The plan was also backed by France, Germany, Italy, Spain, Luxembourg and the Netherlands. Sweden will increase the pressure on Britain to move towards the Europeans' stance by calling a special meeting of EU leaders a week before the Pittsburgh summit.
Hopes of a deal on bonuses appeared to rise on Thursday when Gordon Brown, the French President Nicolas Sarkozy and the German Chancellor Angela Merkel put their names to a joint letter calling for binding rules. But as the finance ministers' talks got underway, it was clear that there was little agreement on the detail – and that Britain would join the US in opposing a cap.