Response to consultation on draft guidelines on the applicable notional discount rate for variable remuneration

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Is the example 2 sufficiently clear and helpful to understand the application of the guidelines?

There are confusing assumptions made in this example, where e.g. figure 2 shows no retention on non-deferred variable remuneration. Furthermore the present value formula is not general, but applies when the ratio is 100% (not e.g. 200%). Further, longer deferral periods are not favoured in the pro-rata model where discounted variable remuneration does not necessarily decrease with the deferral length (is rather a U-curve).

Is the example 3 sufficiently clear and helpful to understand the application of the guidelines?

Yes

Q 9-11: It would further be preferred also having examples assumed a maximum ratio between variable and fixed remuneration above 100%, e.g. at 200%.

Do you agree with our analysis of the impact of the proposals in this CP? If not, can you provide any evidence or data that would explain why you disagree or might further inform our analysis of the likely impacts of the proposals?

Yes

Name of organisation

Swedish Bankers´ Association