Banks under pressure to change incentives

Banks are coming under increasing pressure from regulators, politicians and bank shareholders to review their pay and bonus structures to ensure traders are not incentivised to take excessive risks.

Banks have reported billions of dollars of losses resulting from US subprime mortgage exposures since the third quarter of last year, while Société Générale revealed a €4.9 billion loss in January attributed to a rogue trader attempting to bolster his annual bonus. The losses have caused the industry – including banks themselves – to re-think incentive structures.

“It is not pay cheques for senior management, but individual bonuses for traders that we need to watch,” remarked Carl-Johan Granvik

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account