Bankers who take unjustifiable risks in business deals will be forced to repay their bonuses under new rules unveiled by German financial watchdog Bafin on Friday.
"Aggressive compensation systems, along with other factors, contributed to the financial crisis in that they set the wrong incentives," Bafin said in a statement on changes it is making to its Minimum Requirements for Risk Management standards.
Rewards based on short-term success spurred bankers to take unreasonably big risks but this practice would be eliminated under the new rules, the agency said.
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLE48843820090814
Ouch....
"Aggressive compensation systems, along with other factors, contributed to the financial crisis in that they set the wrong incentives," Bafin said in a statement on changes it is making to its Minimum Requirements for Risk Management standards.
Rewards based on short-term success spurred bankers to take unreasonably big risks but this practice would be eliminated under the new rules, the agency said.
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLE48843820090814
Ouch....
