Regulatory Alerts2010-12-21
Ordinance No 4 of the BNB on the Requirements for Remunerations in Banks
The Bulgarian National Bank issued Ordinance No 4 to establish mandatory principles and requirements for remuneration policies in banks, covering fixed and variable pay for management and risk staff. The regulation mandates that variable remuneration be aligned with long-term performance and risk management, subjecting at least 50% to deferral and retention in equity instruments to prevent excessive risk-taking. It further requires significant banks to form independent remuneration committees, enforces malus and clawback mechanisms, and imposes strict reporting and disclosure obligations to ensure transparency and capital stability.
Share