Bank bonuses may encourage risks: DNB

The Dutch central bank is to take a hard look at whether the bonus culture in banking is encouraging staff to take excessive risks, reports Tuesday’s Financieele Dagblad.

The paper quotes DNB chairman Nout Wellink as saying that the bonuses at international banks are a major contributing factor to the current credit crisis.
Wellink said the DNB would be looking into the history of the awards system at Dutch financial services groups. ‘If we see there has been an impulse to higher risk-taking, we will take action,’ he was reported as saying.
‘Staff who get high bonuses on mass when they book good returns but rarely feel the pinch if they make a loss may be less careful than they should be,’ Wellink said.

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