Banks defying pay rules face 'enforcement'
BANKS who defy guidelines on executive pay could face "enforcement action" and be forced to stump up extra capital reserves, a senior official in the Financial Regulator's office warned yesterday.
Jonathan McMahon, the number two to Financial Regulator Matthew Elderfield, outlined the no-nonsense approach to banking pay yesterday as he unveiled the "new approach" to financial supervision in Ireland.
The Financial Regulator's office is carrying out a wholesale review into how bank boards scrutinise their "remuneration priorities" and how those salary policies influence the level of risk-taking at different banks.
"Clearly, remuneration sits at the centre of this [financial] crisis, not just here but internationally," Mr McMahon said yesterday, pointing to banks' practices of rewarding risk over "prudent management".
Pay in the seven banks