Bank Of England Warns: Bonuses Fuel Risk-Taking


PERFORMANCE-related bonuses play an important role in risk management, according to a new report from the Bank of England (BoE). The BoE's Financial Stability Review warns banks that the common practice of paying bonuses based on profitability encourages traders to take excessive risks.

The BoE's warning comes on the heels of the latest "rogue trader" scandal to hit the UK. Kyriacos Papouis, a former options trader at London-based NatWest Markets, allegedly covered up a £50 million trading loss

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