Survey Says: Banks Continue to Reward Risk

[excerpt] Banks have made progress since 2008 as top management and boards have become more involved in setting risk policy and they developed internal stress testing models, according to the survey of 62 firms released on Tuesday.

But reforms were far from complete, with risk appetite across the firms broadly unchanged, said the report by Ernst & Young, conducted on behalf of the Institute of International Finance (IIF).

It found that in key areas such as compensation, banks had yet to make real headway in aligning pay to risk-adjusted performance.