Featured Product

    FSB Publishes Key Takeaways from Workshop on Compensation Standards

    March 08, 2019

    FSB published the key takeaways from its workshop with banks, on implementation of the international standards on compensation. The workshop was held in London in October 2018. Feedback on the topics discussed at the workshop can be provided by May 07, 2019.

    The following are the key topics covered in the workshop in relation to the actions being taken by banks:

    • Compensation issues such as the post-crisis change in compensation structures. The changes were most pronounced in the European Union and United States and, in general, in jurisdictions where the dialog with supervisory authorities on compensation policies and practices is continuous.
    • Practical steps taken to implement reforms on compensation practice, including details on which individuals are designated as material risk-takers. Many banks noted that the process for identifying material risk-takers has become more structured and consistent across businesses and between banks, partly as a result of the increased regulatory and supervisory guidance.
    • Steps taken to assess effectiveness of the current compensation policies and practices. Banks are increasingly considering the effectiveness of their compensation regimes; however, finding the right metrics and process for these reviews is not simple
    • Increased focus on conduct risk. Several banks emphasized that there had been a fundamental shift toward incentivizing and rewarding positive behaviors, while embedding the conduct agenda at every level of the employee population. A number of banks cited the importance of having management accountability in place so that, where appropriate, compensation actions can be taken against senior management that were accountable for the relevant business. 
    • Use of technology to ensure effectiveness. A limited number of banks reported increased use of technology as part of efforts to ensure the effectiveness of compensation regimes. This included algorithms for identifying outliers, plus back-testing and regression analysis.

    As part of its work to monitor implementation of its Principles for Sound Compensation Practices and their Implementation Standards, FSB engages regularly with firms across financial sectors to assess the extent to which the standards have been effectively implemented.  and challenges and inform the FSB’s biennial progress report on compensation practices. Executives responsible for managing processes related to compensation at 17 large internationally active banks and officials from the FSB Compensation Monitoring Contact Group participated in the workshop. The developments at the workshop will be used as input into the biennial compensation progress report of FSB. This report will be published later in 2019.

     

    Related Links

    Keywords: International, Banking, Conduct Risk, Compensation Practices, Governance, Operational Risk, FSB

    Related Articles
    News

    MAS Concludes Blockchain Payments Prototype Shows Commercial Potential

    MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.

    July 13, 2020 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.10

    EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.

    July 10, 2020 WebPage Regulatory News
    News

    APRA Updates Reporting Validation Rules in July 2020

    APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    July 10, 2020 WebPage Regulatory News
    News

    PRA to Partly Apply EBA Guidelines on Disclosures for COVID Measures

    PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.

    July 10, 2020 WebPage Regulatory News
    News

    EBA Updates List of Correlated Currencies Under CRR

    EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.

    July 10, 2020 WebPage Regulatory News
    News

    FASB Proposes to Delay Implementation of Insurance Contracts Standard

    FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).

    July 09, 2020 WebPage Regulatory News
    News

    APRA Updates Regulatory Approach to Loan Deferrals Amid COVID Crisis

    APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.

    July 09, 2020 WebPage Regulatory News
    News

    BCBS and FSB Set Out Recommendations for Benchmark Transition

    BCBS and FSB published a report on supervisory issues associated with benchmark transition.

    July 09, 2020 WebPage Regulatory News
    News

    IAIS Sets Out Recommendations for Benchmark Transition for Insurers

    IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.

    July 09, 2020 WebPage Regulatory News
    News

    ESMA Updates Reporting Manual on European Single Electronic Format

    ESMA updated the reporting manual on the European Single Electronic Format (ESEF).

    July 09, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5469