Banking Crisis

Swiss Regulator To Unveil Policy On Bankers' Pay - Report

Tom Burroughes, Editor, London, 1 June 2009

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Swiss financial regulator Finma will unveil rules this week on how Swiss banks can pay staff, the newspaper SonntagsZeitung reported, citing unnamed sources.

Finma wants to bind staff compensation to the achievement of long-term targets, the publication said.

A binding "bonus/malus" system - meaning pay cuts in the event of poor performance, as well as bonuses for good results - would also be introduced for all Swiss banks and they would be required to give more details about remuneration policies, SonntagsZeitung said.

The Swiss government has helped to bolster the capital strength of the world’s biggest wealth management firm, UBS, which had sustained almost $50 billion of write-downs stemming from the credit crunch. As a result, the government now supervises the bank's pay structure.

The pay of senior executives has come under a sharper focus not just in Switzerland, but in countries such as the UK and US where taxpayers’ money has been used to strengthen banking groups such as Royal Bank of Scotland – owner of Coutts,  and Citigroup.

Finma did not comment on the report, according to Reuters.

Meanwhile, NZZ am Sonntag, reported that Finma would however not include a top limit on bankers' salaries, which would be likely to attract criticism.

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