Subject: File No. S7-12-11
From: Krissy Ness

May 25, 2011

I am writing you today because the Wall Street Crash affected me in 2008, and I cannot afford for it to happen again.
 I was 20 when this happened and beginning out a life on my own. I ultimately dropped out of school to work, as I could not afford to work and attend class. After almost 4 years I FINALLY got my finances in order. Though I want to attend school again, I am fearful that tomorrow my life will come crashing down, again! Not exactly the best way to start our adolescence out in the world, if you ask me.
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. The stock price goes up, and their options become more valuable. Therefore they can generate more profits.
Why not use 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.
Personally, I feel that if bankers are not required to pay back the debts they owe in a timely manor, why should I? I was hassled day and night to pay back the debt I had on my credit card, and what I owed to MY bank, and I fulfilled my obligations.

Thank you for considering my comment,
Krissy Ness


Krissy Ness

Fargo, ND