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.