Banks to face bonus policy checks

Financial institutions will soon be tested on their remuneration policies in a bid to reduce unease about bonus systems, the finance ministry said on Friday.

From January 1, banks and insurance companies will have to ensure that their remuneration policy ‘prevents the careless treatment of clients and does not encourage unnecessary risk taking,’ the ministry said.
The two financial sector regulators – the AFM and central bank – will carry out the checks, the ministry said.
Banks’ bonus culture is seen as one of the main reasons for the credit crisis, because staff were encouraged to take more and more risks in order to earn bigger rewards.
The Financieele Dagblad did not say what would happen to financial companies which fail to meet the government’s guidelines.