Exposure for banks' risky business

Banks will be forced to publish the pay packets of "material risk-takers", under rules designed to ensure that bankers are not rewarded for reckless behaviour that damages the financial system.

While all listed companies must release a remuneration report to their shareholders, the financial regulator will soon require banks to reveal additional information on the pay of a wider range of staff.

The change, part of a global push to ensure responsible remuneration in banks, will mean lenders must disclose the pay of "senior managers, material risk-takers and risk and management personnel".

A discussion paper from the Australian Prudential Regulation Authority, published on Tuesday, said staff who would be affected included people who make decisions that can affect a bank's financial standing, people who implement and enforce policies on behalf of the board, and those responsible for managing risk.

The new rules will apply to the first reporting period after July.

Bankers' pay arrangements are seen as one factor that contributed to the global financial crisis.

While it has not been a major problem in Australia, some bankers overseas received hefty bonuses for high short-term profit growth, with little regard for the longer-term consequences.

The changes are most likely to affect the big four banks, which already disclose the pay of their chiefs and top executives.