Overview

As a consequence of the financial crisis, and particularly as a result of the bankruptcy and rescue of major global financial institutions in autumn 2008, there has been growing concern in political circles and society as a whole over the lack of symmetry between risk-taking and value creation by executives at financial institutions and their compensation systems.

This has caused some international forums, such as the G20 and the Financial Stability Board, high-level European authorities, such as the European Commission, and international regulatory bodies, such as the Basel Committee and the European Banking Authority to bring compensation practices of financial institutions into the spotlight. Hence, in April 2009, the Financial Stability Forum released a paper entitled ‘FSF Principles for Sound Compensation Practices’, and shortly afterward the Committee of European Banking Supervisors published its High-level Principles for Remuneration Policies. In September 2009, the Financial Stability Board published the implementation standards for its Principles for Sound Compensation Practices.

Following this, the Bank of Spain conveyed, through the Spanish Banking Association, the Spanish Savings Banks Confederation and the National Union of Credit Cooperatives, its recommendations to Spanish financial institutions on the early adoption and implementation of these Principles and Standards.