Regulating Bankers’ Pay in the UK: A Political Economy Perspective
- Date: Wednesday 11 May 2016, 14:00 – 15:00
- Location: Liberty Building
- Cost: Free, registration is required in advance
This seminar is part of the Centre for Business Law and Practice postgraduate research seminar series, where postgraduate students present their work and answer questions about it.
After the financial crisis, in the pursuit of financial stability, the UK has been focusing on the ongoing regulatory reform of corporate governance in the banking sector, mainly emphasising on the issue of executive remuneration. In major industrialized countries, the issue of bankers’ pay was blamed for that the equity-based pay incentivized excessive risk taking and failed to link the managerial incentives to the sustainability and long-term profitability of banks. In the UK, the issue was even described as ‘rewards for failure’.
However, the criticized payment system was just based on the belief that the calculation of executive remuneration should rely on market prices. In a jurisdiction with the ideology of free market efficiency, will the sudden turn towards intense regulation be efficient in achieving the goal of financial stability? Is it just a technique in banking regulation? What are the roots of the UK regulator’s motivation in regulating bankers’ pay? Is there any political economy factor that may influence the regulatory reform?