The Rise and Value of the FSB Principles for Sound Compensation Practices

07 Apr 2011

London, UK

ICFR Briefing: "Lost in Implementation: The Rise and Value of the FSB Principles for Sound Compensation Practices at Financial Institutions".
 

Presentation by Maria Cristina Ungureanu, University of Genoa, Centre for Law and Finance



 

Overview    

This year’s runner-up to the ICFR-FT Research Prize 2010, Maria Cristina Ungureanu from the University of Genoa, presented a paper entitled “Lost in Implementation: The Rise and Value of the FSB Principles for Sound Compensation Practices at Financial Institutions”, written with her co-author, Prof. Guido Ferrarini. The paper analyses the principles for sound compensation practices at financial institutions and their implementation standards (PSSCPs), which were issued in 2009 by the Financial Stability Board (FSB). The authors examine the political economy of the PSSCPs and analyse their formation as a result of the recent financial turmoil. Also considered are the roots of the PSSCPs in pre-crisis best practices, their flexibility, adaptability, and their role in prudential regulation. They further examine post-crisis PSSCP implementation in the EU and the US. The core argument is that the PSSCPs are only the first step in a complex global reform process operating regionally and nationally. However, this process is marked by political conflicts which have been only partially solved by the G20 and which may determine significant variations amongst different legal systems. Some of these, including EU law, are transforming international standards into rigid and detailed prescriptions for the mechanisms and structures of bankers’ compensation; other systems either keep the flexibility of the standards in their regulations or rely mainly on a supervisory approach.
  

Further Resources    

 Download the paper by Maria Cristina Ungureanu and Prof. Guido Ferrarini      
 Download the summary   
 Download the presentation   
  

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