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9 ECFR 1 (2012)

handle is hein.journals/ecomflr9 and id is 1 raw text is: New Regulation of Remuneration in the Financial Sector in the EU by ElLis FERRAN The EU has laid claim to leading the way in cracking down on bankers' bonuses. Yet in spite of new rules, the level of payouts in the financial sector has continued to startle. A sceptical public could be forgiven for doubting whether there has been any progress at all. This article tests the robustness of the EU's claim by examining, first, whether its approach has been influential internationally and, secondly, whether it has set especially tough standards. The article explains how the EU can do quite well on both tests yet still have failed to do much to rein in lavish awards. The article also considers the relative unimportance of remuneration reforms in the constellation of changes needed to make financial markets safer. This assess- ment casts a shadow over the EU's global leadership role in this area. Table of Contents ECFR 2012, 1-34 I. Introduction............................... . . . . . . . . . . 2 II. The systemic significance of remuneration structures: a global lesson from the financial crisis ..................................... 4 III. The international politics of post-crisis financial sector remuneration regu- lation ......... ............................................. 8 IV Charting the impact of the crisis on EU regulation of financial sector remu- neration ............................................ 15 1. Scope ........................................... 19 2. Remuneration policies and related governance requirements ....... ...20 3. Remuneration, capital and supervisory oversight ............... 21 4. Remuneration disclosure and transparency requirements .......... ... 21 5. Structure of remuneration packages ............................ 24 V Taking stock .......................................... 29 Eillis Ferran, Professor of Company and Securities Law, University of Cambridge, Centre for Corporate and Commercial Law (3CL) and JM Keynes in Financial Econom- ics, University of Cambridge. ECGI Research Associate. Contact email: evf1000@cam. ac.uk. I am grateful to Brian Cheffins, Niamh Moloney and an anonymous reviewer for insightful comments on draft versions of this paper. The usual disclaimer applies. -IL I .Cr yt L. - r' -r4-t2 z- s 1~.