Regulatory Alerts2021-10-25
Regulation of Remuneration at Credit Institutions
The Deutsche Bundesbank outlines the comprehensive prudential regulation of remuneration at credit institutions, which mandates that incentive systems align with sustainable development and risk management. The framework imposes strict limits on variable pay, including a bonus cap for staff and a prohibition on variable components for supervisory board members, while requiring precise identification of risk takers. These rules, derived from EU directives and national law, apply proportionally to ensure larger institutions face stricter oversight while reducing administrative burdens for smaller entities.
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