Research Student: Longjie Lu
Comparing Regulations of Bankers’ Remuneration in the UK and China: Do Current Regulatory Systems Work?
In the introspection of the GFC that began in 2007, remuneration at significant financial institutions has been deemed as one factor among many that contributed to this turmoil. There has been a widespread concern that the pre-crisis remuneration arrangement for senior executives in banking sector is partly to blame as it has driven those bankers to take excessive risks in short terms rather than pursue the long-term development for their banks. In order to prevent the similar events of failure in the future, international regulatory bodies and authorities in many jurisdictions around the world have responded speedily in the immediate aftermath of the GFC. In particular, the issue of bankers’ remuneration incentives has rapidly drawn the attention of regulators at national, supranational and international level and a consensus of reforming and strengthening the regulation of bankers’ remuneration has been gradually reached among them.
The issue of bankers’ remuneration has become the subject of intense public focus and the major field of banking regulatory reform, it is however still debatable both in practice and among the academia. When regulators in different countries eagerly trying to figure out a solution to curb excessive risk-taking incentivized by bankers’ remuneration, among academic discussions the crucial questions that whether it is necessary to regulate bankers’ remuneration and how to regulate bankers’ remuneration efficiently in a certain jurisdiction, still remain very controversial.
Moreover, it is noteworthy that the incentives and remuneration schemes in western industrialized countries (market-based) and emerging markets countries (more state intervention) are completely different with each other. The differences in the issue of bankers’ remuneration and its regulation, between different jurisdictions, are highly embedded in the economic, political and social backgrounds. Thus, in order to solve the current problems and pursue the effectiveness of regulation in bankers’ remuneration, appropriate remedies, in accordance with all relevant circumstances, should be applied to the right jurisdictions.
As a consequence, this research will choose the UK and China, two very typical representative countries in both the worlds of developed markets and emerging markets, to compare their current legal approaches in regulating bankers’ remuneration.
This comparative study will try to achieve the objectives below:
1. To consider the theoretical justifications to law and regulation on bankers’ remuneration, mainly in the context of free market economies.
2. To provide the empirical evidences (with second-hand sources) about how do the level and structure of bankers’ remuneration impact on banking stability.
3. With a comparative law perspective, to give a systemic and analytic exposition of the post-GFC regulatory systems for controlling bankers’ remuneration in both western developed countries and emerging market countries, by illustrating two typical jurisdictions in each group: the UK and China; to comprehensively compare the similarities and differences between them and to analyse the reasons of each regulatory system’s characteristics.
4. To identify how regulations for controlling bankers’ remuneration in free market economies should be reformed to maintain banking stability
PhD in Law, Module Assistant in Banking and Financial Services Law, University of Leeds (funded by Leeds International Research Scholarship)
Master in Law, Peking University
Dual Bachelors in Economics and Law, Nankai University
What are my plans once I have completed my PhD?
I would like to continue my career in academia.