Banks need to collect more data to check that their pay structures aren’t encouraging staff to take unnecessary risks, global financial-stability watchdogs have said, as the UK sets out plans to review controversial bonus-cap rules.
The Basel-based Financial Stability Board introduced global guidelines on senior managers’ pay in 2009, in response to fears that excessive bonuses encouraged short-term risk taking rather than long-term business value.
Jurisdictions across the world have now mostly implemented those principles, in some cases going further than the international minimum standards and looking beyond immediate financial metrics, the FSB says in a report today.
Bank-bonus monitoring needs more data, FSB says, as UK plans review
17 June 2019 8:28pm