May 31, 2011
Elizabeth Murphy
100 F Street, NE
Washington, DC 20549
Dear Murphy,
America paid a terrible economic price because of irresponsible risk-taking by Wall Street executives. Those executives took those risks because they knew that they could walk away with billions of dollars in bonuses and stock options and never pay for the long-term consequences of their actions. We need tough rules so that Wall Street pay packages don't encourage short-term risk taking.
Your rules should require at least a five year deferral period for executive bonuses at big banks, ban executive hedging of their pay packages, and require specific details from banks on precisely how they ensure that executives will share in the long-run risks created by their decisions. It should apply to the full range of important financial institutions, and draw in all the key executives at those companies.
Once this rule is passed, only you will know the details of its enforcement. But it's important for the public to know the progress you are making on this vital issue. You should report back to the public annually with a detailed report on progress in creating accountability for Wall Street pay.
People in the banking and finance community should introduce some concern for the economic future of this country, and also for the rest of the world because we no longer live in the world of Adam Smith, when supposedly the "Unseen Hand" would guide the greedy behavior of a lot of small players, competing with each other, with a result of general prosperity for everyone. A lot of people around the world are suffering now because of the actions of those relatively few in the financial and banking community, and that disquiet among world populations become the greatest threat to our national security. For their own sake as well as for the sake of the rest of us, our money managers must begin to care without rationalizing.
Referencing Docket No.'s:
OTS: RIN 155-AC49
OCC: RIN 1557-AD39
Fed: RIN 7100-AD69
SEC: RIN 3235-AL06
FHFA: RIN 2590-AA42
FDIC: RIN 3064-AD56
Sincerely,
Mr. Arnold Frogel
New York, NY 10001