As early as in 1963, a financial economist from the Bundesbank worked at the German consulate general in New York and simultaneously held the post of Bundesbank representative at the world’s most important financial centre.
Employees are less likely to take imprudent risks if their incentive payments are reduced or eliminated for activities that end up imposing significant losses on the firm. The guidance identifies four methods that have been most often identified by firms, consultants, and others as useful in aligning incentive compensation with risk.