FSB progress report on compensation structure reforms

The Financial Stability Board has today published a review of progress in applying the Principles for Sound Compensation Practices and their Implementation Standards: see here (pdf). The following overview is provided in the accompanying press release (available here, pdf)

The FSB Principles and Standards were endorsed by the G20 Leaders at their summits in London in April 2009 and Pittsburgh in September 2009. In their Pittsburgh statement, the G20 Leaders tasked the FSB “to monitor the implementation of FSB standards and propose additional measures as required by March 2010".

Significant progress has been made in incorporating the FSB Principles and Standards into domestic regulatory and supervisory frameworks. Compensation structures in the major financial firms have changed [in] response. But full implementation is far from complete. Sustained efforts by firms and authorities remain necessary to effectively align compensation structures in major financial institutions with prudent risk-taking".