Posted on 01/07/2010 5:44:50 AM PST by TigerLikesRooster
FDIC Mulls Linking Fees To Bank Pay
01-07-2010 | Source: emii.com
People & Companies in the News
The Federal Deposit Insurance Corporation (FDIC) is considering linking fees paid by lenders to the agency for deposit insurance to the risk profile of compensation packages for executives, The Wall Street Journal reports. Banks with compensation structures viewed as less risky by the FDIC may be given a break on the fees they pay on deposit insurance.
Banks that the FDIC considers to have pay structures that gives officials an incentive to put the company at more risk might be forced to pay more. The FDIC already requires banks to pay more in deposit insurance fees if they are on shakier footing, accept large amounts of high-risk deposits, or rely heavily on funding from Federal Home Loan Banks.
By the way, less risky profile reportedly includes such things as allow firms to claw back pay from executive
P!
No this should absolutely NOT be linked to pay. It needs to be linked to the systemic and business risks of the bank.
What a stupid idea! Insurance premium should be calculated on the risk factor of the loan portfolio. It’s not executive pay that sinks banks, it’s the devaluation of the loan portfolio and capital reserves.
Well said!
*SIGH*
I can’t find any place to put my liquid emergency cash that’ll earn sh!t these days. 1.6% is the highest I can find and that’s with Capitol One, who has irritated me to no end in the past trying to cancel a VISA I once held with them.
Even ING Direct is only offering 1.3%. A mason jar buried in the backyard is looking more and more appealing...
Any suggestions?
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