May 30, 2011
Every time I have reported fraud or other malfeasance to the SEC I have been told that under existing guidelines there was nothing they could do but keep a record of my infomation. What greater impetus and encouragement can there be for the activities of scoundrels on the lookout than that? The SEC doesn't ask for weakness, it has weakness thrust upon it by the shabbiest "conservative" congressmen yet to pollute the nation's repositories of effort and hope. How can I or any other trust recipient ever receive what anyone's last wishes are meant to bestow?
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,
R. A. Wheeler