icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm

Russian Central Bank to increase controls over bankers' bonuses and salaries

Russian Central Bank to increase controls over bankers' bonuses and salaries
The Russian government is poised to amend 2 banking laws which will authorize the Central Bank to limit banker’s salaries and supervise both domestic and international branches.

The State Duma Committee on Financial Markets will meet on Friday, and is expected to approve the bill, as they already have support from both government and bank deputies.

If approved by deputies, the Central Bank will increase control over banks, their owners, executives, and executive bonuses. Starting in 2014 banks will be required to prepare a consolidated report in accordance with International Financial Reporting Standards

The Central Bank will be able to influence banking systems, including bonuses, said Mikhail Sukhov, the Bank’s Deputy Chairman. If it sees fit the bank can set individual standards for banking groups.

“Specific restrictions and sanctions will be outlined later in a separate piece of legislation,” said Sukhov.

Starting on July 1, all banks will be required to submit their payroll documents to the Central Bank.

“In general, we support the amendments. It is important for the Central Bank to understand the concentration risks in banks and to regulate controls abroad,” Anatoly Aksakov, the deputy president of the Association of Regional Banks, said in support of the amendments.

The Central Bank will also be able to check on international subsidiaries, as long as the probes are within parameters of local jurisdiction. 

“If there are any violations to ‘daughter’ companies, we have no right to use these sanctions, but the [Russian] ‘parent’ company will be able to impose fines and sanctions on the ‘daughter’ company in order to correct violations,” said Sukhov

Alexander Levkovsky, first deputy chairman of SMP Bank, agrees that the new controls will mostly affect banking groups with foreign subsidiary branches.

For low-quality risk management or corporate governance the Central Bank will be able to set individual standards for banks.

Dear readers and commenters,

We have implemented a new engine for our comment section. We hope the transition goes smoothly for all of you. Unfortunately, the comments made before the change have been lost due to a technical problem. We are working on restoring them, and hoping to see you fill up the comment section with new ones. You should still be able to log in to comment using your social-media profiles, but if you signed up under an RT profile before, you are invited to create a new profile with the new commenting system.

Sorry for the inconvenience, and looking forward to your future comments,

RT Team.