More bank executives are being urged to follow the lead of the board of Deutsche Bank and give up bonuses for 2008, but any investors waiting for an apology for the crisis could be in for a long wait.
Executives at banks hit hard by the credit crisis are facing pressure to forego bonus payments in recognition of mistakes made and - as in the case of Deutsche Bank - to spread their wealth to staff hit hard by the tough economic outlook.
"We think it would be best practice to have some acknowledgement of failure by waiving elements of remuneration," said Tom Powdrill, head of communications at PIRC, a UK firm that advises institutional investors on corporate governance.
"From a corporate governance perspective there's got to be some recognition that under performance-related remuneration when things go badly wrong you don't get a payout."
Banks across Europe are aware that scrutiny on executive pay has been heightened and are wary of how to handle the situation, several industry observers said.
Several banks said the decision lies with individual executives, and some fear a move by all the board would signal their bank is to blame for the problems, the observers said, adding that bonus structures should reflect the falling profits and share price.
European and US banks could take more pre-emptive action, however.
"There has to be a certain amount of humility shown by the senior executive of the banks," said Steven Friel, a litigation partner at Davies Arnold Cooper solicitors in London.
"There is a sense in middle America that they have been let down by Wall Street. Anything short of the humility that Deutsche Bank has shown in this will be unacceptable to the public," he added.
An apology from any bank is unlikely for legal reasons.
"There is little or no prospect of anybody standing up and saying 'It's our fault'," said Martin Brewer, a labour law expert at Mills & Reeve law firm.
"You have to be careful that you are not admitting legal liability. In this case, it would be possible to say we could have done better, we could have seen the warning signs sooner... without necessarily saying we're responsible for people losing their houses," he added.
Bank share prices have crashed and profits have been hit by big losses on risky assets. That prompted lenders to hoard capital, which deepened an economic slowdown and has forced banks into emergency fundraisings or to be rescued or part-nationalised.
Deutsche Bank, Germany's biggest bank, said yesterday its top executives will forego 2008 bonuses in reaction to the crisis, the first complete board to take such a stance.
The money given up by its Chief Executive Josef Ackermann and others will be used to prop up wages of other bank employees whose salaries are hit harder by the effects of the finance crisis, the bank said.
Some bank executives elsewhere have declined bonuses, including Morgan Stanley chief executive John Mack, who passed up his 2007 bonus.
Outgoing chief executives at Royal Bank of Scotland and HBOS this week said they would not take payouts after Britain stepped in to take stakes in the banks.
The DJ European Bank Stoxx index has more than halved this year, slumping to an 11-year low this week.
Reuters