January 28th in Banker Hate, Banking News, City News, Financial Crisis by Editor .
So Banker Pay Did Contribute to Hobbling of the Economy
“Pay structures had the unintended consequence of creating incentives to increase both risk and leverage”…
That’s according to the Financial Crisis Inquiry Commission, a panel set up in the US to probe the origins of the financial crisis. The panel has just released a hefty document in which it disclosed its findings including the following, not wholly unsurprising, conclusions:
Bloomberg: Stock-option bonuses motivated financial firms to use leverage to boost returns, and traders were given “aggressive incentives” to dissuade them from defecting
…
The dangers of the new pay structures were clear, but senior executives believed they were powerless to change it.
Music to the ears of the haters.
