IIF Compensation Reform in Wholesale Banking 2011

Assessing three years of progress.

Compensation structures were one of many factors that contributed to the rise in overall risk levels within the Financial Services industry prior to the financial crisis of 2008 by not adequately taking into account the risk involved in generating revenues.

Compensation reform has sought to develop a new risk-aligned system of compensation and significant industry progress has been made since the initial IIF survey conducted in 2008. While this year’s survey shows notable areas of significant progress, some unintended consequences have started to emerge which merit the attention of both regulators and management of wholesale banks.

In this annual collaboration with the IIF, we examine the results of the latest survey of 51 leading banks representing Europe, Americas, Asia Pacific, the Middle East and Africa and analyse the impact that compensation reform is having on the wholesale banking industry. 

IIF Compensation Reform in Wholesale Banking 2011