Fed's Alvarez favours balanced incentive compensation design
Scott Alvarez, the general counsel for the Federal Reserve, on Friday said the design of compensation packages in banking and financial services must be well thought out, as an unbalanced incentive scheme may lead executives to take imprudent risks.
In testimony before the House Committee on Financial Services, Alvarez said: "While strong and effective risk-management and internal control functions are critical to the safety and soundness of banking organisations, poorly designed or implemented
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