US Fed moves towards rules-based approach to bonuses

Robert Jackson

US regulators are expected to announce hard limits on the use of upfront cash in bank bonuses, moving away from the more principles-based approach previously favoured by the Federal Reserve.

Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires federal banking regulators to “jointly prescribe regulations or guidelines that prohibit any types of incentive-based payment arrangement” that "create inappropriate risk". Such rules would apply to financial companies with

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