FSB says no proof banks skirt pay rules to poach
LONDON (Reuters) - There is no clear evidence that the world's biggest banks are bending global rules on curbing excessive bonuses to poach senior staff from rivals, a top regulator said.
The Financial Stability Board said on Tuesday some banks say different interpretation of the global rules was creating unfairness, particularly when it came to luring top staff from rivals.
More data was needed before such accusations were proven.
"Because the details of competitive bidding for key employees are rarely revealed, the extent of differences in practice and the main cause of firms' concerns remain difficult to assess," the FSB said in a report.
Supervisors faced with such concerns should thrash them out head-to-head with peers who supervise lenders accused of not applying the G20 rules properly, the FSB said.
"National supervisors should work bilaterally to verify and, as needed, address specific level playing field concerns raised by their respective institutions," the FSB said, adding this would help determine where "coordinated multilateral action might be helpful."
The FSB report was its second review of nine principles and 15 standards agreed in 2009 by the Group of 20 leading economies (G20) to stop bankers netting hefty bonuses by taking big risks.
The G20's regulatory task force, said top firms like BNP Paribas (BNPP.PA), Deutsche Bank (DBKGn.DE), Goldman Sachs (GS.N), HSBC (HSBA.L) and JPMorgan Chase (JPM.N) generally applied the rules consistently though some countries still lag.
The FSB will present its review to G20 finance ministers and central bankers this weekend in Paris.
Achieving lasting change in behaviour and culture within firms is a long-term challenge that requires a sustained commitment, the FSB said.
It recommends that all FSB members complete implementation of the standards and principles, and that firms deemed significant should comply with remuneration disclosure requirements by January.
Despite considerable strides in implementing the G20 principles, more work was necessary to achieve sound compensation practices, the FSB said.
The review surveyed supervisors from FSB member countries and 70 banks and broker dealers deemed significant, though one Russian firm did not respond.
Of 24 jurisdictions which are members of the FSB, 13 have implemented all 9 principles and 15 standards.
Australia, Switzerland and the United States have implemented all but one of the standards, while Brazil and China have yet to implement two.
Significant gaps remain in Argentina and South Africa, while India, Indonesia and Russia have been making progress.
In January, the European Union introduced pay curbs that were more detailed and stricter than the G20 principles, and it may toughen them up even further.
(Editing by Dan Lalor)
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