Home » Domestic Policy » Federal Reserve Plans to Control Banking Salaries

Federal Reserve Plans to Control Banking Salaries


Under a new proposal set to be released soon, the Federal Reserve will give itself the authority to reject compensation on CEOs, traders, and loan officers that it feels takes on too much risk. More than 5,000 bank holding companies will be affected by this proposal, including hundreds of small, state-charted institutions. About 25 of the U.S.’s largest banks would receive even closer scrutiny.

As the Wall Street Journal describes it,

The Fed’s latest move marks another striking exertion of power by the nation’s central bank since the financial crisis struck with ferocity two years ago. It has bailed out firms such as American International Group Inc. and has flooded the financial system with money.

Ironically, this move comes at a time when an overwhelming majority want to audit and restrict the powers of the Federal Reserve.

The Federal Reserve board will consider this proposal within the coming weeks. They claim that if it is approved, they will open it up for “public comment”, however, I think what they mean is the Fed will make a comment about it in public.

Sources: The Wall Street Journal


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: