Overview

• Remuneration policies in the banking sector incentivised excessive risk-taking, thereby contributing to the financial crisis. Since the crisis, remuneration rules have come into force to better align employees ’ incentives with the long-term health of banks and the financial system. • This article explains the key components of the Prudential Regulation Authority’s remuneration rules for banks and considers the direction of the global policy agenda. Bonus regulation: aligning reward with risk in the banking sector By Marilena Angeli and Shahzad Gitay from the Bank’s Cross-Sectoral Policy Division.(1) (1) The authors would like to thank Christopher Gynn for his help in producing this article