FSA warns banks on executive pay rates

The letter, from FSA Chief Executive, Hector Sants, set out the continuing work the FSA is conducting to address the issue and offers a number of recommendations on how schemes should work. To support its view, the FSA argue that both the Counterparty Risk Management Group (CRMPG) and the International Institute of Finance (IIF) identified remuneration structures as one of the possible driving forces behind the current problems. The letter states that the FSA believes in many cases the remuneration structures of firms may have been inconsistent with sound risk management. It continued: "...