Cayman Net News
   Welcome to Cayman Net News Online: Today's print edition 
Search: web our site     

News from the Cayman Islands for
Prev    Next

Fed to propose wide-ranging bank pay rules

Published on Sunday, September 20, 2009 Email To Friend    Print Version

The US Federal Reserve building is seen on July 30, 2009 in Washington, DC. (AFP PHOTO)

WASHINGTON (Reuters) - The U.S. Federal Reserve is close to proposing wide-ranging rules on bankers’ pay that would apply to any employee able to take risks that could threaten the safety and soundness of the institution, a Fed source said on Friday.

The source, speaking on condition of anonymity, said the guidelines would apply to all firms regulated by the Fed and would be enforceable under its existing supervisory powers.

Massive losses inflicted by risky bets on U.S. subprime mortgage loans last year destroyed some of the oldest names in U.S. banking and pushed the global financial system to the brink of collapse.

The rules would aim to curb excess short-term risk-taking by any employee, not just bank executives, and would take a two-pronged approach.

Larger firms would be subject to a horizontal review process to compare their practices against rivals, while the compensation review for smaller banks would be part of their regular bank exams, the Fed source said.

The proposal has not yet been voted on by the Fed’s Board of Governors in Washington, but the timeline for the guidelines to advance was weeks, not months, the Fed source said.

Reads : 1517


No comment for this topic yet. Be the first one to give comment.


Send us your comments!  

Send us your comments on this article for publication in our Readers' Forum or as a Letter to the Editor. All fields are required and in the interest of openness and transparency we will no longer accept anonymous submissions. We therefore request that all submissions include a name for publication, regardless of content. We will in special circumstances protect a writer's identity only after we have established good cause for anonymity, otherwise we will not be able to publish the submission.

For your contribution to reach us, you must (a) provide a valid e-mail address and (b) click on the validation link that will be sent to the e-mail address you provide.  If the address is not valid or you don't click on the validation link, it will be a waste of your time typing your submission because we will never see it!

Your Name:
Your Email: (Validation required)
Enter Validation Code *

Click here for the latest print edition