Subject: File No. S7-12-11
From: Susan Bailey

May 27, 2011


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.

Due to the economic crash caused mainly by Wall Street, we had an extremely hard time selling our house which put us in financial trouble.  My husband's business was also hit hard, and now we are living day-to-day in fear that we will have to declare bankrupcy.  Without the business, there is no income; and who is going to hire a 65 year old.  How can we pay any of our bills?  And what becomes of the workers when we have to close the business?  We both have worked hard all of our lives; we didn't deserve this.  The crash was caused by pure greed, complete lack of oversight, and the unwillingness of our bought-and-paid for Congress to properly regulate the financial industry.
Regulations and rules must be put in place to protect ordinary people that work hard for every penny they earn.  We don't push papers, dream up schemes, and find loopholes to take money from others.
We didn't deserve this, the American people didn't deserve this!  Now, we are poised to have it happen again.  Even though Congress passed financial reform, those so-called reforms don't go far enough; and republicans are fighting the reforms tooth-and-nail.  They are weakening and voting against every regulation, every agency, every protection that the democrats are trying to put in place to protect American citizens.  Now, I ask you - is that good for America?
What are you going to do to protect America - not the financial industry - AMERICA!!!  What is truly good for this country - that is what you need to do.

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,

Susan Bailey

Akron, OH