 Remuneration policies in the Italian banking system: compliance with best practice and future perspectives

This paper focuses on remuneration policies in banking, an issue that is not particularly studied in relation to its importance to financial institutions' long-term viability and the sustainable growth of the economy as a whole. It aims to assess, through a gap analysis, the level of compliance with best practice in the remuneration policies of Italian banks prior to the implementation of new standards established as a result of CRD IV, as well as the FSB and EBA principles. It also seeks to analyse the evolution of remuneration systems in relation to new international standards in order to identify theoretical and practical implications. The study reveals that the long path through which today's standards have developed has basically fostered a learning process within the banking sector, which has led to a material respect for most of the best practices. In the same time, it also shows the presence of grey areas, which still undermine the full consistency of bank policies with sound remuneration practices.