FSB published the fifth progress report on implementation of FSB Principles for Sound Compensation Practices and their Implementation Standards. The report, which was prepared by the FSB Compensation Monitoring Contact Group, focuses on remaining implementation gaps, key challenges, and evolving practices. The report also examines links between compensation and misconduct and provides insight into compensation practices in the securities sector, the issues which have been in focus since the publication of the last report in November 2015.
The progress report shows that almost all FSB member jurisdictions have substantively implemented the Principles and Standards for banks. Indonesia and Turkey have addressed significant gaps identified at the time of the last progress report in 2015, while South Africa is yet to fully implement them. With the help of increased use of back testing or validating compensation practices and policies, supervisors and banks are working to ensure effective implementation of compensation systems. The report shows that in-year adjustments to compensation continue to be the compensation tool of choice. The progress report includes a section on compensation practices in the securities sector, written jointly by FSB and IOSCO. Most of the surveyed IOSCO members have some compensation-related regulation in place. The report concludes that compensation practices vary across the securities sector. This variation mainly stems from the diversity of firms and their business models and activities. FSB will continue to explore ways to further assess the effectiveness of aligning compensation policies with risk at financial institutions.
Keywords: FSB, International, Progress Report, Compensation Practices, Banking, Insurance, Securities
Previous ArticleESMA Decides to Delay Publication of Double Volume Cap Data
Next ArticleDNB Issues Insurance Newsletter for June 2017
PRA published the policy statement PS14/20, which contains the supervisory statement SS1/20 and the feedback to responses to the consultation paper CP22/19 on expectations for investment by firms in accordance with the Prudent Person Principle, or PPP, as set out in the Investments Part of the PRA Rulebook.
EBA published an opinion following the notification by the French macro-prudential authority, the Haut Conseil de Stabilité Financière (HCSF), of its intention to extend a measure introduced in 2018 on the use of Article 458(9) of the Capital Requirements Regulation (CRR).
As part of a Research Bulletin on the recent policy-relevant work, ECB published an article that examines the lessons learned from past crises for nonperforming loan resolution in the post COVID-19 period.
RBNZ published the financial stability report for May 2020. This review of the financial system in the country highlights that the economic disruption associated with COVID-19 will present challenges to the financial system.
ECB updated the guidance notes for reporting related to the statistics on holdings of securities by reporting banking groups (SHSG).
ECB published results of the financial stability review in May 2020. Among other issues, the financial stability review assesses operations of the financial system so far during the COVID-19 pandemic.
Financial policymakers and international standard-setters met virtually with private-sector executives to discuss international policy responses to COVID-19 pandemic.
ESMA published a letter responding to IASB on the exposure draft on the phase 2 of the interest rate benchmark reform.
HKMA is consulting on revisions to the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.
EBA published thematic note presenting a preliminary assessment of the impact of COVID-19 outbreak on the banking sector in EU.