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

    ECB Allows Temporary Relief in Leverage Ratio Amid COVID-19 Pandemic

    ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.

    September 21, 2020 WebPage Regulatory News
    News

    ESAs Launch Survey on Templates for Product Disclosures Under SFDR

    ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).

    September 21, 2020 WebPage Regulatory News
    News

    ECB Proposes Integrated Reporting Framework to Reduce Burden for Banks

    ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.

    September 21, 2020 WebPage Regulatory News
    News

    ECB Finalizes Methodology to Assess CCR and A-CVA Risk of Banks

    ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.

    September 18, 2020 WebPage Regulatory News
    News

    EBA Provides Opinion on Definition of Credit Institution in CRR

    EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).

    September 18, 2020 WebPage Regulatory News
    News

    APRA Consults on Alignment of Daily Liquidity Report for Banks

    APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.

    September 17, 2020 WebPage Regulatory News
    News

    FED Releases Scenarios for Second Round of Stress Tests on Banks

    FED released hypothetical scenarios for a second round of stress tests for banks.

    September 17, 2020 WebPage Regulatory News
    News

    FED to Temporarily Revise FR Y-14 Reports to Conduct Stressed Analysis

    FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.

    September 17, 2020 WebPage Regulatory News
    News

    FED Revises Information Collection Under Market Risk Capital Rule

    FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).

    September 17, 2020 WebPage Regulatory News
    News

    EBA Seeks Input on ESG Disclosure Practices of Banks

    EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.

    September 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5809