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8 - Market or State: Differences in the Regulations and Practices of Bankers’ Remuneration in the UK and China

Published online by Cambridge University Press:  15 September 2022

Longjie Lu
Affiliation:
University of Edinburgh
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Summary

This chapter compares the differences between the UK and China in their regulations and practices of bankers’ remuneration and analyses the institutional reasons for the differences.The problem of bankers’ remuneration in the UK was the distorted market practice. The purpose of the regulation is to correct market failures. Nevertheless, the regulators also intend to keep the balance between regulatory intervention and bank autonomy. In China, the practice of bankers’ remuneration was based on the administrative and politicised approach. The regulation is to guide banks to modernise their remuneration systems. However, it is not effectively implemented, as the state maintains its decisive role. The differences between the two countries are due to the different institutional traditions of their financial systems, as the current regulation and practice of bankers’ remuneration have been profoundly influenced by the traditional model of state–market interaction.

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Chapter
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Market or State
The Regulation and Practice of Bankers' Remuneration in the UK and China
, pp. 206 - 227
Publisher: Cambridge University Press
Print publication year: 2022

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