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?

Example 2 is sufficiently clear and helpful to understand the application of the guidelines.

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

Example 3 is sufficiently clear and helpful to understand the application of the guidelines.

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?

Whilst we generally agree with the impact analysis of the proposals, there is some feeling that the guidelines do not provide the best means of incentivising long-term deferral structures due to a lack of practicality, and complexity. This is due to the discount depending heavily on external factors and the resulting volatility makes it difficult to explain and not reliable enough to be used in real life compensation strategies. As an alternative, the regulator could decide on a fixed discount table of at least 25% if certain criteria for deferral and retention periods and / or structures are met.

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Name of organisation

Associazione Bancaria Italiana