The European Banking Authority (EBA) has published a report on the application of the CRD IV regarding the principles on remuneration policies of credit institutions and investment firms and the use of allowances.

In the report the EBA states that it is of the view that role-based allowances which are discretionary, not predetermined, not transparent to staff or not permanent should not be considered as fixed but should be classified as variable remuneration, in line with the letter and purpose of the CRD IV.

The EBA also states that following the publication of the report, institutions which use such discretionary role-based allowances will be expected to treat them as variable remuneration and change their remuneration policies so that they comply with the requirements for variable remuneration in article 94 CRD IV. Member state competent authorities are expected to ensure that institutions classify discretionary role-based allowances appropriately and implement the necessary changes in line with the CRD IV requirements on remuneration. The EBA is also developing guidelines on remuneration which will be open to public consultation. The EBA will be working closely with the European Commission in reviewing the provisions on remuneration, including identifying where the legislation requires further reinforcement, e.g. by requesting disclosures of newly introduced remuneration components. A report on this review is due to be submitted by the Commission to the European Parliament and the Council of the European Union by 30 June 2016.

View EBA discloses probe into EU bankers’ allowances, 15 October 2014