May 19, 2011
Please return the financial market back to the boring business of accounting so investors know what is being done with THEIR money, for them, the investor.
Wall Street has no business creating wealth among its own minions - they exist to complete transactions as directed by investors.
Phony is growth is counter productive. The disgraceful collapse of the financial markets has resulted in a transfer of wealth from me to finance their debt. It has also enslaved future taxpayers, which in effect, is TAXATION WITHOUT REPRESENTATION ( Remember that?? )
I agree with the following:
I’m writing because my family and I were affected by the economic collapse of 2008, and we don’t want it to happen again.
Wall Street greed and outrageous pay practices were a major cause of the collapse. One way to change the incentives so they don’t collapse our economy again would be for regulators to use a *safety index* for incentive compensation, instead of a profit index.
Currently, most bankers receive stock options. So if they can generate more profits, the stock price goes up, and their options become more valuable.
Instead, what if they used the bank’s bond price, which measures the overall ability of the bank to repay its own debt? Another measure of bank stability is the spread on credit default swaps (the insurance-like policies that are essentially bets, where one gambler bets with another that a particular firm will fail). The closer a bank comes to failing (such as in failing to pay of its bond debt), the bigger the spread on credit default swaps.
Thank you for considering my comment,
Mary Munn