Subject: Comments for File Number S7-12-11

May 24, 2011

Iím writing because I am one of the lucky Americans now retired from a career that has provided me with a retirement that I believe will continue for the rest of my life.

I chose government service rather than searching for wealth, knowing that part of the contract would be a secure retirement. Others are not so lucky. Many expected secure retirements and those retirements are either reduced or gone. Others have only Social Security and certain legislators would like to privatize that program so it can go the way of Wall Street. And we have all seen what Wall Street values! It's certainly not the American people!

Wall Street must be regulated. Regulations dropped over the years should be reinstated given current realities. Unchecked Wall Street will continue to behave as it did leading to the crisis and as it is now in reaping huge profits and giving huge bonuses to those who got us into this mess - all the while complaining about paying a fair share of taxes and giving up unneeded subsidies.. The idea that Wall Street could be expected to regulate itself is absurd! There is no morality in Wall Street (nor multinational corporations); greed dominates and profits are used to justify actions that are often criminal!

Wall Street greed and outrageous pay practices were a major cause of the collapse. One way to change the incentives so they donít 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 bankís 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 comments.

Susan Selbin