When employers in the banking sector negotiate agreements with
key employees regarding variable or post-termination pay, they may
be legally required to include explicit ‘malus' and
‘claw back' provisions. This article discusses such
requirements in Italy and beyond.
In recent years, and especially in the wake of the 2008
financial crisis, governments and bank regulators have
issued a number of important rules aimed at
improving the risk management and governance of
banks and strengthening the transparency of the banking
system.
The European Union first intervened in this arena with a
directive in 2010, followed by further directives in 2013 and 2019.
One of the primary aims of these directives was for banks to adopt
remuneration policies and practices that reflect and promote sound
and effective credit risk management.
