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Geithner: Pay Changes Ahead for Bank Execs

By Kevin Spak,  Newser Staff

Posted May 22, 2009 12:09 PM CDT
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(Newser) – The Obama administration intends to push for “very, very substantial change,” in the way Wall Street pays executives, Treasury Secretary Tim Geithner tells Bloomberg. “I don’t think we can go back to the way it was,” he said, arguing that the current big-bonus status quo encourages too much risk-taking. The changes will be part of the administration’s larger regulatory overhaul.

Geithner also said there was “real concern” some banks were trying to repay their TARP loans too quickly. He said banks would have to show they had significantly more capital than they needed, and the ability to raise capital on their own, before they could repay the government. And though credit is tight, Geithner said he wouldn’t force banks to lend.

Treasury Secretary Timothy Geithner testifies on Capitol Hill on Wednesday before the Senate Banking Committee.
Treasury Secretary Timothy Geithner testifies on Capitol Hill on Wednesday before the Senate Banking Committee.   (AP Photo)
Treasury Secretary Timothy Geithner testifies on Capitol Hill yesterday before a House Appropriations subcommittee.
Treasury Secretary Timothy Geithner testifies on Capitol Hill yesterday before a House Appropriations subcommittee.   (AP Photo)
Treasury Secretary Timothy Geithner testifies on Capitol Hill yesterday before a House Appropriations subcommittee.
Treasury Secretary Timothy Geithner testifies on Capitol Hill yesterday before a House Appropriations subcommittee.   (AP Photo)
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COMMENTS
Showing 3 of 4 comments
Robert_Dada
May 23, 2009 12:06 PM CDT
It's a noble effort but if it gets too aggressive and punitive, they'll set up off shore entities and shell companies to dole out compensation that is out of reach of the law.
Nwambe
May 22, 2009 8:01 AM CDT
Oh please, the whole thing could've been avoided had the Bush administration simply not pursued such an aggressive deregulatory policy. Now in an effort to point out that their behaviour has consequences, the USG has chosen to support the banks until they are on sound footing, and then make sure that they understand that 'too big to fail' won't happen again.
Newser001
May 22, 2009 7:46 AM CDT
Ya thank?!! What about futures / commodities trading, as well...? Short term bonuses yield dangerously pretentious behavior, bringing us to this very juncture, forced upon all of us - All by a banking / securities sector, the utter lack of responsible oversight and rede deregulation lobbyists, catering to a very guilty representation / government.

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executive compensation • bonuses • financial sector • bank regulation • banking industry • Timothy Geithner • executive bonuses

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