Sunday, October 25, 2009

Pay Czar to Expand Regulatory Powers Beyond TARP Recipients?

This is a big part of why I said you should be nervous about Obama's Pay Czar trying to cut executive salaries for some TARP recipients. It may start with a few (politically unconnected) TARP recipients; but if you think the government will not try to expand from there, I have a bridge I would like to sell you.

http://legalinsurrection.blogspot.com/2009/10/most-monumental-power-grab-you-never.html

"The pre-weekend information dump included an announcement by the Federal Reserve and Treasury Department that the federal government proposes to extend its control over pay packages beyond financial institutions which received bailout funds.

According to the press release, the government proposes to monitor and, if need be, veto pay packages at any banking institution subject to federal regulation:
Flaws in incentive compensation practices were one of many factors contributing to the financial crisis. Inappropriate bonus or other compensation practices can incent senior executives or lower level employees, such as traders or mortgage officers, to take imprudent risks that significantly and adversely affect the firm. With that in mind, the Federal Reserve's guidance and supervisory reviews cover all employees who have the ability to materially affect the risk profile of an organization, either individually, or as part of a group.
This is an earth-shattering development in the annals of government control, yet because the information was released on a Friday, it has received little press attention relative to its importance.
"

No comments:

Post a Comment

Post a Comment

Related Posts with Thumbnails

Like what you read; Subscribe/Fan/Follow