In the event of a serious mistake, bank managers would have to return the rich bonuses they have already pocketed. Not only to punish those who, for example, have caused long-term losses to their institution, but also – and above all – to reduce risk appetite. This is one of the measures proposed by the International Monetary Fund, which aims to limit the dangers to which banks can be exposed, often with serious consequences for the community.
The recommendations are contained in the third chapter of the Global Financial Stability Report, released in view of the Annual meetings to be held next week at the institute's headquarters in Washington DC.
In addition to the belief that compensation should be deferred and precisely include a repayment clause, the Fund also proposes
– better “alignment of rewards with risks”;
– a “consistency” between risk culture and financial stability; a composition of the boards of directors aimed at making them "independent from the bank's management" and which allows not only the interests of the shareholders to be taken into consideration, but also those of the bond holders;
– greater “transparency to promote accountability and strengthen market discipline”.
