Regulating Banking Bonuses in the European Union: a Case Study in Unintended Consequences
Beginning in 2014, the European Union (EU) will limit the amount of bankers' bonuses to the amount of fixed remuneration; the cap could be increased to 2:1 with the backing of a supermajority of shareholders. I demonstrate that the pending EU regulations restrictions will: (1) increase rather t...
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| Veröffentlicht in: | European financial management : the journal of the European Financial Management Association 2013-09, Vol.19 (4), p.631-657 |
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| container_title | European financial management : the journal of the European Financial Management Association |
| container_volume | 19 |
| creator | Murphy, Kevin J. |
| description | Beginning in 2014, the European Union (EU) will limit the amount of bankers' bonuses to the amount of fixed remuneration; the cap could be increased to 2:1 with the backing of a supermajority of shareholders. I demonstrate that the pending EU regulations restrictions will: (1) increase rather than decrease incentives for excessive risk taking; (2) result in significant increase in fixed remuneration; (3) reduce incentives to create value; (4) reduce the competitiveness of the EU banking sector; and (5) result in a general degradation in the quality of EU investment bankers, thereby decreasing access to capital and increasing the cost of capital. |
| doi_str_mv | 10.1111/j.1468-036X.2013.12024.x |
| format | Article |
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| identifier | ISSN: 1354-7798 |
| ispartof | European financial management : the journal of the European Financial Management Association, 2013-09, Vol.19 (4), p.631-657 |
| issn | 1354-7798 1468-036X |
| language | eng |
| recordid | cdi_proquest_miscellaneous_1441807818 |
| source | EBSCOhost Business Source Complete; Wiley Online Library All Journals |
| subjects | Bankers banking bonuses Banking system Bonuses Capital costs CEO pay Competitiveness Europe European Union Executive compensation financial crisis International Investment banks Monetary unions regulation Regulation of financial institutions Studies |
| title | Regulating Banking Bonuses in the European Union: a Case Study in Unintended Consequences |
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