Is stricter regulation of incentive compensation the missing piece?

Wall, Larry D.

doi:10.1057/s41261-019-00119-8

Cited by 7 publications

(2 citation statements)

References 31 publications

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“…announce that a certain number of offences in different areas will lead to a similarly harsh treatment as in case of repeated misconduct of the same kind. Last but not least, it can be argued that criminal prosecution of individuals instead of institutions should be pursued more frequently (Gilchrist, 2014;Wall, 2020). Ideally, such a policy would restrict the illicit activity of banks without stopping their normal business.…”

Section: Policy Implications and An Indication Of Future Prospectsmentioning

confidence: 99%

Do not mention Russia: A theoretical framework for bank penalties due to economic sanction violations and policy implications

Brož,

Pace,

Gahir

et al. 2023

Banks and Bank Systems

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In this paper, penalties to banks violating economic sanctions have been investigated and discussed. This topic has sparked renewed interest and attention following the beginning of the conflict in Ukraine due to the Russian aggression in February 2022 and the ongoing general deterioration in the global economic climate. Thus, based on the experience with penalties to banks for violations of economic sanctions from 2007, a theoretical model has been proposed. It is proposed that this model may be informative in devising the optimal level of penalties based on behavioral characteristics of banks and regulators. The model is based on the economic examination of the motives and incentives for bank misconduct, by drawing on the Shapiro-Stiglitz model addressing typical consequences of asymmetric information in principal-agent models. From a policy perspective, the proposed model also has the potential to provide opportunities for standardization of restrictions posed on banks as a result of bank misconduct. Relevant policy implications concerning penalties are put forward that may be implemented for future considerations, particularly in cases related to violations of economic sanctions.

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Section: Policy Implications and An Indication Of Future Prospectsmentioning

confidence: 99%

Do not mention Russia: A theoretical framework for bank penalties due to economic sanction violations and policy implications

Brož,

Pace,

Gahir

et al. 2023

Banks and Bank Systems

View full text Add to dashboard Cite

show abstract

“…Employee compensation, both at the higher and lower levels, matters for banking outcomes such as risk-taking(Wall, 2020).2 In 2014, for example, the EU introduced a bonus cap of 100% of fixed pay. The bonuses, i.e.…”

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confidence: 99%