Authors
Joachim Müller and Jean-Baptiste Bellon
Changing regulatory structure in the global financial sector is underway in the wake of the G20’s decision in April to establish the Financial Stability Board (FSB) as the world’s first overarching financial regulator. The FSB’s mandate is to restore trust by strengthening financial regulation but lack of regulatory and punitive powers seriously weakens its regulatory abilities. The G20 has mandated the FSB to implement the compensation principles for ‘systemically significant’ financial institutions, but Cheuvreux considers these principles insufficiently detailed to discourage the short-term focus of incentive schemes. Basel II may prove more useful here when it comes to pay restraint.