Central bank urges financial sector comply with its new bonus code

The central bank has told banks, insurance companies and asset managers they must comply with its code of conduct on executive pay by March 31, the Financieele Dagblad reports.

The code, drawn up by the central bank and financial services sector regulator AFM, is supposed to remove pay components that could encourage bankers to take too many risks. This follows agreement that the old bonus system was one of the main causes of the credit crisis.
Over the past two months, the bank has written to all companies in the financial services sector urging them to get their houses in order, the paper says.
The central bank’s code is more concrete and goes further than the one drawn up by the banks themselves. They were approved by the government in mid-December.
Foreign banks also fall under the central bank regime, the paper states.

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