German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed to take a common approach regarding bankers' bonus payments, following a meeting in Berlin on Monday.

Unbridled risk-taking by some bankers has often been cited as one of the main factors that led to the global financial crisis, and the incentive of lucrative bonus payments has often been blamed for stoking bankers' willingness to take chances.

"The international community needs to understand that the excesses of speculation and financial (institutions) which led to the crisis cannot resume as though nothing had happened," Sarkozy said in Berlin.

Merkel reiterated demands for international regulations that would keep the size of global banks in check.

"No bank can be allowed to become so big that it is in a position to blackmail governments," she said.

Merkel and Sarkozy have also called on the European Union to adopt a common stance before the two-day G-20 meeting, which is to be held in the US city of Pittsburgh beginning on September 24.

Global regulations a tough sell

Despite Berlin and Paris both coming out in clear support of international bank regulations as a way of preventing any future global financial crisis from happening, getting the rest of the G-20 nations to accept these terms is another story.

"You need the acceptance of all of the G-20 countries, especially the United States and Great Britain," Wolfgang Gerke, president of the Bavarian Center of Finance, told Deutsche Welle. "They feel that their financial centers would suffer if there is too much regulation. And therefore they are for continuing the system they had for many years."

He noted that in the absence of international standards countries that do have tough bonus regulations would be at a disadvantage compared to countries with looser regulations.

"[German investment bankers] would tell the government: if they are too strict, they will quit the country and go to other places, like London," Gerke said.

Political tool for Merkel

The G-20 meeting comes less than a month before a general election in Germany and it could provide a large platform for Merkel to gain the sympathies of voters.

"The German public will be quite in favour of more regulation of the bonus system," Gerke said.

mz/dpa/afp

Editor: Chuck Penfold