The big banks should rein in the "eye-popping" salaries they pay top execs and shift to a more principles-based rewards system, FDIC chief Sheila Bair tells Bloomberg. Bair, along with House Democrats and New York's attorney general, says if the banks don't change their ways, regulators should set standards to make sure top bankers are paid for long-term results instead of quick gains.
"I do wish some of these firms would exercise better restraint and common sense on what they’re paying their folks,” Bair says. Bonus packages that encouraged risk-taking are widely blamed for the financial crisis. The House—which expressed outrage at AIG's paying of millions in bonuses while receiving billions in federal funds—approved legislation last week that will give regulators the ability to restrict financial sector pay packages that encourage risk-taking, and will let shareholders vote on executive compensation.