BANK REMUNERATION RULES: A CASE STUDY OF POST-GFC REGULATION REFORM

Following the global financial crisis, reform of remuneration and compensation practices within the financial sector has been an important aspect of the global reform agenda. With reforms to the rules governing compensation one of the first areas to be implemented under the new international institutional framework, this experience highlights potential issues for other parts of the reform agenda. These include: the importance of international consistency to prevent regulatory arbitrage; finding the optimal balance between regulation and supervision; the scope of prudential regulation; and the extent to which the effectiveness of reforms is determined by their implementation.