Following the global financial crisis in 2008, the EU adopted a broad range of measures designed to enhance the regulation and stability of its financial institutions. During the discussions surrounding the adoption of these measures it was considered that the design of the remuneration schemes within these institutions was one of the major contributors to the crisis. Often involving sizeable bonus pay-outs in comparison to salaries, this encouraged employees to engage in excessive risk taking in order to share in the banks’ short term profits, but not in the cost of their failures which, in the most serious cases, were borne by the taxpayer. The ”Capital Requirements”package of legislation adopted in 2013 by the Council and the Parliament (known as the CRD IV Package and composed of a Directive1and a Regulation2) therefore included a series of measures to regulate this matter.
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