A newly proposed plan would give the Federal Reserve the ability to reject banking employee pay plans if the Fed feels such plans allow the banks to take on excess risk, according to the Wall Street Journal. The policy, if approved, would allow the Fed jurisdiction over compensation policies for any banking employee responsible for risk transactions. The proposal would also likely push banks to use clawback measures to reclaim payment after workers have taken harmful risks.
Federal Reserve Could Have Sway in Bank Compensation
The Federal Reserve is floating a proposal that would give the Fed compensation control over banking employees.
September 18, 2009