Bankers’ Remuneration Reforms and New Challenges (Bankers’ remuneration reforms)

Corporate Governance: An International Review https://onlinelibrary.wiley.com/doi/10.1111/corg.12454

37 Pages Posted: 24 Jul 2020 Last revised: 22 Sep 2022

See all articles by Anna (Ania) Zalewska

Anna (Ania) Zalewska

University of Bath - Centre for Governance, Regulation and Industrial Strategy; School of Management

Date Written: February 1, 2022

Abstract

The desire to structure bankers’ remuneration in a way that it is risk sensitive and aligned with the long-term incentives of their institutions was at the centre of the post Global Financial Crisis (GFC) regulatory reforms. A decade later, it is unclear whether the reforms achieved what they were intended for and whether they have resulted in some unintended consequences. The issue of unintended consequences is particularly important given that the banking sector needs to embrace technological innovation (Fintech) and sustainable banking agenda.

We are still far from understanding the real costs and benefits of the remuneration reforms because it is difficult to isolate the impact of remuneration restrictions from the impact other regulations and policies had on restricting risk-taking, banking structures and bonus culture. However, even if it is questionable whether the remuneration reforms contributed positively towards improving the stability of the banking sector, they seem unsuitable for promoting Fintech and sustainable agenda.

Keywords: banking, remuneration, fintech, climate change risk, sustainability, regulation

JEL Classification: G20, G28, G38, G01, G39

Suggested Citation

Zalewska, Anna, Bankers’ Remuneration Reforms and New Challenges (Bankers’ remuneration reforms) (February 1, 2022). Corporate Governance: An International Review https://onlinelibrary.wiley.com/doi/10.1111/corg.12454, Available at SSRN: https://ssrn.com/abstract=3640239 or http://dx.doi.org/10.2139/ssrn.3640239

Anna Zalewska (Contact Author)

University of Bath - Centre for Governance, Regulation and Industrial Strategy; School of Management ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom
+44 0 1225 384354 (Phone)
+44 0 1226 384354 (Fax)

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