Swiss central banker calls for pay reforms in sub-prime aftermath
Banks should reform their pay structure in the wake of the sub-prime crisis to avoid encouraging traders to take reckless risks, Jean-Pierre Roth, chairman of the Swiss National Bank's governing board, said on Friday, according to an AFP report
"For a financial centre like ours - which includes international banks whose private banking arms generate substantial revenue and consequently rely on having a spotless reputation - such action is vital," the top Swiss central banker said in a speech at the centenary celebrations of the SNB.
A rethink of corporate governance and strengthening of rules was vital to maintain the reputation of Switzerland's financial centre, he added.
Roth said that "the banks that have been buffeted by the financial storm must take a careful look at the various ways in which they apply corporate governance.
"In particular, they should examine the role of their respective boards of directors in carrying out the necessary checks and balances to ensure efficient risk management, and they should correct the excesses of their remuneration system in a manner that does not put short-term results ahead of the long-term performance."
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