scholarly journals Executive Remuneration Policy at Banks in Poland After the Financial Crisis - Evolution or Revolution?

2014 ◽  
Vol 17 (2) ◽  
pp. 25-44 ◽  
Author(s):  
Agnieszka Słomka-Gołębiowska ◽  
Piotr Urbanek
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Executive Pay ◽  
Legal Rules ◽  
Good Corporate Governance ◽  
Executive Remuneration ◽  
Remuneration Policy ◽  
Recent Financial Crisis ◽  
Public Banks ◽  
The Stability

The executive remuneration policy of financial institutions has been indicated as one of the key factors that led to the recent financial crisis. As a consequence a number of legislative initiatives and best practices have been imposed,aimed at strengthening existing and creating new standards of good corporate governance at banks. The purpose of this article is to assess the effectiveness of Poland’s new regulations concerning banks' executive pay, which were introduced in the aftermath of the recent financial crisis. The research results indicate that the new legal rules have not been fully enforced. Public banks in Poland are not fulfilling the reporting obligations imposed by law and international principles. Given the crucial importance of executive remuneration policy in the financial sector to the stability of the banking sector, the inability to evaluate the progress made in the adjustment of executive remuneration practices to the new regulations may be perceived as one of the important risk factors that has not been effectively eliminated or even reduced in Poland yet.

scholarly journals How to evaluate the quality of remuneration policy? Evidence from the Polish banking sector

2020 ◽  
Vol 70 (3) ◽  
pp. 423-447
Author(s):  
Agnieszka Słomka-Gołębiowska ◽  
Piotr Urbanek
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Institutional Perspective ◽  
Top Executives ◽  
Executive Remuneration ◽  
Remuneration Policy ◽  
Governance Practices ◽  
Foreign Corporations ◽  
Public Banks

AbstractIn our paper we use an institutional perspective to define the concept of the quality of remuneration policy. Traditional perspective focuses on pay-per-performance relationship between top executives' remuneration and companies' performance. This study is based on the assumption that the acquisition of normatively defined compensation practices and structures is more important for the successful organization than the practices which enhance efficiency defined on the basis of input (compensation) – output (company's performance) relationship. We examine the relationship between the quality of executive remuneration policy and corporate governance standards in banks with a controlling blockholder. Based on the sample of a hand-collected data on corporate governance characteristics, executive remuneration, and financial results of all public banks in Poland from 2005 to 2015, we find that the effective implementation of sound corporate governance practices should be rooted in the form of obligatory normative acts. Consistent with other studies we find a positive and statistically significant relationship between the corporate governance measures and the quality of remuneration policy. In particular, our study shows the significant role of two institutional factors positively determining the efficiency of incentive contracts: remuneration committees and institutional ownership. We also find that the banks controlled by foreign corporations, especially the US–UK–Ireland financial institutions, have a significantly more effective compensation policy than the banks controlled by domestic investors.

THE IMPORTANCE OF THE BANKING UNION FOR THE STABILITY OF THE FINANCIAL SECTOR IN THE EURO AREA

2018 ◽  
Vol XIX (6) ◽  
pp. 129-134
Author(s):  
Elżbieta Kołodziej
Keyword(s):  
Financial Crisis ◽  
Euro Area ◽  
Banking Sector ◽  
Financial Sector ◽  
Legal Framework ◽  
Banking Union ◽  
The United Kingdom ◽  
Public Aid ◽  
Research Goal ◽  
The Stability

The research goal of this study is to assess the significance of the banking union for the stability of the financial sector in the euro area. A review of available literature, legal acts and the analysis of statistical data relevant to the research objective of the work turned out to be necessary to prepare the work. The financial crisis that began in 2007 had its source in the deregulation of financial markets, the lack of legal framework for supervisory institutions and inadequately functioning market information system. Public aid for banks in the EU within 5 years (2008-2012) amounted to nearly EUR 4 trillion. The majority of public aid (75%) was addressed to euro area banks. The largest amounts of public aid were directed to support banking systems in Ireland, the United Kingdom, Germany and Spain. In the case of Ireland, this led to almost bankruptcy. The crisis has led to changes in the approach to the security of the financial sector including the banking sector of countries belonging to the euro area. The most important project implemented in response to the financial crisis is the banking union. The banking union is based on three pillars: the Single Supervisory Mechanism (SSM), Single Resolution Mechanism (SRM), the Single Deposit Guarantee Scheme (SDGS).

Post-East Asian Financial Crisis: Challenges and Opportunities for the Banking and Financial Services Sector in Singapore

2001 ◽  
Vol 04 (04) ◽  
pp. 495-521 ◽  
Author(s):  
Siew Tong Fock ◽  
Ann Chai Wong
Keyword(s):  
Financial Crisis ◽  
Financial Services ◽  
Banking Sector ◽  
East Asian ◽  
Asian Financial Crisis ◽  
Services Sector ◽  
Financial Services Sector ◽  
Challenges And Opportunities ◽  
The Stability ◽  
International Financial Center

The East Asian financial crisis revealed the structural weaknesses of the banking systems in Asia. Post crisis, there were signs of limited recovery of the region in sight, but the region-wide reforms would take some time to complete. This paper identifies the main challenges and opportunities that are posed to the financial sector in Singapore in a post East Asian financial crisis scenario. Preserving the stability of the banking sector whilst engendering a more efficient use of capital remains a central issue in this paper. The paper also evaluates the liberalization measures adopted by the Monetary Authority of Singapore to enhance the development of Singapore as a leading international financial center.

scholarly journals Examining Risk-Weighted Assets (RWA) Performance after Recent Financial Crisis in Malaysian Banking System

2018 ◽  
Vol 10 (5) ◽  
pp. 129
Author(s):  
Siti Nor Amira Mohamad ◽  
Mohamad Yazis Ali Basah ◽  
Muhammad Ridhwan Ab Aziz
Keyword(s):  
Financial Crisis ◽  
Annual Report ◽  
Global Financial Crisis ◽  
Secondary Analysis ◽  
Banking System ◽  
Risk Measurement ◽  
Quantitative Approach ◽  
Capital Ratios ◽  
Recent Financial Crisis ◽  
The Stability

Until recently, there has been only muted debate on the stability of RWA and after the recent financial crisis, the new regulatory framework was introduced that will enrich the quality and level of capital ratios for the banking system. However these capital ratios required to be based on specific risk measurement that permits for appropriate comparison as these gives new prominence to the stability of the underlying RWA. The aim of this paper is to examine the RWA performance after recent global financial crisis in Malaysian banking system. The study uses quantitative approach to examine in detail the RWA performance from year 2012 to 2016 using secondary analysis of bank’s annual report.

scholarly journals Corporate governance of insurers in Germany. German National Report

2020 ◽  
Vol 109 (1) ◽  
pp. 41-64
Author(s):  
Jens Gal
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Banking Sector ◽  
Insurance Industry ◽  
Solvency Ii ◽  
Competitive Environment ◽  
Insurance Sector ◽  
The Past ◽  
Good Corporate Governance ◽  
Paternalistic Approach

Abstract Corporate governance is the set of rules, be they legal or self-regulatory, practices and processes pursuant to which an insurance undertaking is administrated. Good corporate governance is not only key to establishing oneself and succeeding in a competitive environment but also to safeguarding the interests of all stakeholders in an insurance undertaking. It is insofar not surprising that mandatory requirements on the administration of insurance undertakings have become rather prolific in recent years, in an attempt by regulators to protect especially policyholders against perceived risks hailing from improperly governed insurance undertakings. In Germany this has been regarded by many undertakings as an overly paternalistic approach of the legislator, especially considering that the German insurance sector has experienced for decades if not centuries a remarkably low number of insolvencies and that German insurers were neither the trigger nor the (especially) endangered actors in the financial crisis commencing in 2007. Notwithstanding the true core of this criticism, that the insurance industry was taken to a certain degree hostage by the shortcomings within the banking sector, the reform of German Insurance Supervisory Law via implementation of the Solvency II-System has brought many advances in the sense of better governance of insurance undertakings and has also brought to light many deficiencies that the administration of some insurance undertakings may have suffered from in the past, which are now more properly addressed.

scholarly journals The wrong perspective on executive pay

2016 ◽  
Vol 11 (1) ◽  
pp. 6-11
Author(s):  
Alexander Chau
Keyword(s):  
Financial Crisis ◽  
Pay For Performance ◽  
Agency Problem ◽  
Performance Model ◽  
Low Risk ◽  
Executive Pay ◽  
Social Equality ◽  
Executive Remuneration ◽  
Financial Crisis Of 2008

Controversial commentaries as brought on by the financial crisis of 2008 regarding corporate remuneration policies give misplaced priority to political considerations over the governance considerations of capitalist orthodoxy. Executive pay rules during the crisis reflected the market’s sense of low risk that was prevalent at the time. The existing pay-for-performance model as applied demonstrates that the agency problem is not widespread and more a matter of transparency than one of systemic corporate graft. The wrong perspective involves pushing for social equality, rather than business efficacy, as the ultimate driver of reforms in executive remuneration.

Financial Contagion and Shock Transmission During the Global Financial Crisis

2020 ◽  
pp. 173-197
Author(s):  
Thomas J. Flavin ◽  
Dolores Lagoa-Varela
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Propagation Mechanism ◽  
Financial Contagion ◽  
Shock Transmission ◽  
Cast Doubt ◽  
Recent Financial Crisis ◽  
The Stability ◽  
The Global Financial Crisis ◽  
Investment Portfolios

After the recent financial crisis, the analysis of shock transmission across the financial system has received a great deal of attention. In particular, the role of financial contagion as a shock propagation mechanism has been studied in detail. The globalisation of financial and banking markets has increased the connections and relationship between them. Hence, recent crises have spread all around the world. The stability of linkages between financial assets across different market conditions cast doubt upon the benefits of portfolio diversification. This chapter reviews the extant literature on financial contagion during the global financial crisis and thus provides information for both portfolio managers (when optimizing their investment portfolios) and policymakers (when designing their strategies in order to mitigate spillover effects during crisis periods).

Remuneration consultants’ advice and its effect on pay

2015 ◽  
Vol 57 (4) ◽  
pp. 340-350 ◽  
Author(s):  
Ernestine Ndzi
Keyword(s):  
Best Practice ◽  
General Meeting ◽  
Annual General ◽  
Executive Pay ◽  
Annual General Meeting ◽  
Content Type ◽  
Executive Remuneration ◽  
Remuneration Policy ◽  
The Usa ◽  
The Uk

Purpose – The purpose of this paper is to investigate the nature of advice that the remuneration consultants offer to the companies on executive pay. It explores how the advice offered affects the level of executive remuneration. Furthermore, it investigates whether the nature of advice offered forms part of the reasons why remuneration consultants have been criticised to be correlated with high executive pay. Design/methodology/approach – This paper analysis the data obtained from interviewing remuneration consultants from prominent consultancy firms that operate in the UK and the USA. Findings – This paper demonstrates that remuneration consultants’ advice on executive remuneration is not always objective. The nature of advice depends on whether the consultants have a balance of portfolio of companies (self-interest) or whether they have the courage to stand up to confrontations from the executives (fear of executives). This study shows that the purpose of using remuneration consultants in advising on executive remuneration is defeated. Also, the practice pushes up pay levels. Research limitations/implications – The research focused on large consultancy firm operating in the UK and/or the USA. Access to the participants was very difficult due to their busy schedules. Practical implications – This paper demonstrates the effect that lack of best practice on benchmarking is partly responsible for the high executive pay levels. Social implications – This paper will inform companies on the nature of advice that remuneration consultant’s offer and its effect on pay levels. Secondly, it will provide the shareholders with vital information they require to vote on remuneration policy in the annual general meeting. Originality/value – This paper demonstrates the effect that lack of best practice on benchmarking is partly responsible for the high executive pay levels. This paper will inform companies on the nature of advice that remuneration consultant’s offer and its effect on pay levels. Secondly, it will provide the shareholders with vital information they require to vote on remuneration policy in the annual general meeting. Lastly, it informs policymakers on the grey areas of practice that requires best practice.

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