Pub. 5 2010-2011 Issue 2

July/August 2010 17 Extraordinary Service for Extraordinary Members. P L A C I N G B A N K S I N T W O categories—1) large, com- plex banking organizations (LCBOs) and 2) regional, community, and other banking orga- nizations—the Fed is laying out the framework for short-term and longer- range changes to its oversight of compensation and risk practices and policies. The expectations outlined by the Fed apply to all those the Fed supervises including, “U.S. bank hold- ing companies, state member banks, Edge and agreement corporations, and U.S. operations of foreign banks with a branch, agency, or commercial lending company subsidiary in the United States.” In outlining its guidance on sound compensation policies, the Fed has said Q Compensation Policies — continued on page 18 Fed Issues Guidance on Sound Incentive Compensation Policies Eleanor Bloxham , CEO, The Value Alliance No matter how the rest of the legislative and regulatory landscape shakes out, it appears clear that the Federal Reserve Board is stepping up its oversight of bank risk practices.