PwC's Managing upstream risk: Regulatory reform review - An asian perspective November 2013 | Page 22
2.16 Bonus Cap and Remuneration
Update
22
On 29 November 2013, the EBA published a
report on the remuneration of EU bank staff
who received one million Euro or more in total
in 2012. Figures show that the number of high
earners was limited in most EU member states
but quite significant in some others. The report
is part of EBA’s work on bank staff remuneration
policies aimed at ensuring prudent and
sustainable risk taking in the EU banking sector.
The highest values were reported for the UK
(2,714 high earners), Germany (212), France
(177), Italy (109) and Spain (100). The figures
include staff paid by institutions, including
subsidiaries or branches of any EU-parent
institution based in another member state
other than the one where the parent company
is located, as well as staff in branches of third
country institutions.
The report also provides a preliminary analysis
of remuneration structures across the EU. Most
high earners were found to belong to categories
that include functions with responsibilities
throughout the whole institution, from the
executive board, to risk management, internal
audit, information technology, communication,
auditing, corporate finance, legal and human
resources.
Regulatory Reform Review |
The data in the report will feed into the overall
work of the EBA on remuneration in the EU
banking sector. As required by the EU CRD, this
aims at ensuring that institutions’ remuneration
policies not only allow for sound and effective
management, but also provide an incentive for
prudent long-term risk taking in the EU banking
sector.
2.17 Risk Management
Update
On 18 November 2013 FSB published two
papers to assist supervisors in strengthening
risk management practices at FIs:
1. Principles for an Effective Risk Appetite
Framework; and
2. Guidance on Supervisory Interaction with
Financial Institutions on Risk Culture.
In summary, the FSB Principles set out key
elements for:
• an effective risk appetite framework,
• an effective risk appetite statement,
• risk limits, and
• defining the roles and responsibilities of the
board of directors and senior management.