Proportionality Principle For Luxembourg Banks' Remuneration Requirements

Introduction

Excessive and imprudent risk taking in the banking sector has led to the failure of many institutions, and regulators and governments have identified inappropriate remuneration policies as having wrongly incentivised such risks. However, it may not always be appropriate to apply the same remuneration requirements to credit institutions and investment firms of different sizes. On November 24 2010 the European Parliament adopted the EU Third Capital Requirements Directive (2010/76/EC). This was followed on December 10 2010 by final guidelines from the Committee of European Banking Supervisors (CEBS) on the application of proportionality rules to remuneration.

Implementing circulars