Banks under pressure to change incentives

Banks have reported billions of dollars of losses resulting from US subprime mortgage exposures since the third quarter of last year, while Société Générale revealed a €4.9 billion loss in January attributed to a rogue trader attempting to bolster his annual bonus. The losses have caused the industry – including banks themselves – to re-think incentive structures. “It is not pay cheques for senior management, but individual bonuses for traders that we need to watch,” remarked Carl-Johan Gran

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