ABSTRACT
This chapter explores the regulatory rules affecting financial institutions' internal governance that have been introduced in the aftermath of the 2007–2009 crisis. It sets out the soft-law and regulatory rules regarding financial institutions' board structure and the organisation of their risk management function. The chapter explores the detailed regulatory framework in place on senior executive remuneration in banks with special emphasis on the Capital Requirements (CRD IV) Directive IV rules that limit the amount of variable remuneration paid as a percentage of fixed remuneration. It traces the evolution of the 'fit and proper' requirement for bank senior managers and focuses on the recently introduced Senior Persons Regime applicable to banks, investment firms and insurance companies. The chapter examines the regulatory rules that enable regulators to pursue individual enforcement against financial institutions' senior managers and explores the way the Prudential Regulation Authority (PRA) has used these powers in recent enforcement cases arising out of the Co-operative Bank crisis in 2013.
