(Rewrites throughout with details)
PARIS Aug 25 (Reuters) - French President Nicolas Sarkozy announced new limits on bonus payments to bank traders on Tuesday and said he would press partners in the Group of 20 nations to adopt the same standards as Paris.
Amid growing international concern over bank bonus payments that have been creeping up to levels seen before last year's financial market meltdown, Sarkozy called in the heads of France's biggest banks to announce tougher controls.
"I was scandalised to see the lessons of the crisis being forgotten so quickly by some people at a time when the page has not even been turned on the crisis," Sarkozy said after the meeting the Elysee Palace.
Outrage over bonuses in France has been stoked by concern that banks have been tight-fisted in lending to small companies, despite the massive injections of public support made available to the financial sector.
He said banks would henceforth be required to defer two thirds of bonuses paid to traders over three years and make a third of the payout in bank stock.
If an operation on which a bonus was paid lost money in the two years afterwards, the deferred part of the bonus would not be paid out.
He said compliance would be closely monitored and banks that did not follow would be shut out of lucrative mandates for state activities such as share placements and privatisations.
"We will not work with banks that do not apply these rules," he said.
Sarkozy has been among the loudest international critics of unrestrained financial market practices and has seized on public outrage over the huge bonuses widely blamed for encouraging the excessive risk-taking that contributed to the financial crisis.
The issue was already addressed at a G20 meeting in London earlier this year and is expected to be among the top issues at a meeting of G20 finance ministers in London on Sept 4-5 and the leaders' summit in Pittsburgh on Sept 24-25.
Sarkozy, who meets German Chancellor Angela Merkel next week to try to build support ahead of next month's meetings, said Pittsburgh would be a "decisive encounter" and he said he would be pressing his partners to follow France's lead.
"We will arrive in Pittsburgh with decisions that we have already taken," Sarkozy said. "We want the G20 to adopt rules on governance, transparency and responsibility which will be those already in force in Paris."
He also said the issue of setting upper limits on bonus payments, either by restricting payouts to a proportion of bank revenues devoted to investment, setting a global tax on bonus payments or imposing a ceiling, would have to be discussed.
"These limits, everyone understands, can only be international. If we just decided to limit them in France everyone would leave," he said.
There is heavy political pressure in France for action, particularly given concern that banks have been tight-fisted in lending to small companies, despite the massive injections of public support made available to the financial sector.
French banks adopted a code of good conduct based on broad G20 guidelines in February in exchange for receiving billions of euros in liquidity support from the government aimed at ending huge guaranteed bonuses.
But the debate in France was rekindled when it emerged that BNP Paribas (BNPP.PA), had set aside 1 billion euros ($1.43 billion) for possible bonuses after reporting a 6.6 percent rise in second quarter profits.
Sarkozy said BNP had agreed to put the new rules in place immediately meaning only half of this sum would now be needed.
Britain, home to Europe's biggest financial centre, the City of London, has threatened legislation if bankers do not change their ways, but all countries have been held back by concerns that if they crack down too hard, others will draw the benefits.
BNP chief executive Baudouin Prot, who takes over as head of the French banking federation next month, said French banks would comply with Sarkozy's directive but he said the measures would have to be adopted globally to be fully effective. (Editing by Andy Bruce)