U.S. Treasury Secretary Geithner attacks bank bonuses

Posted Dec 7th 2009 10:30AM by Connie Madon
Filed under: Management, Politics

U.S. Treasury Secretary, Geithner, was severely critical of excessive bank bonuses. In a recent interview he said, "We want to see fundamental constraints on how senior executives are paid at these institutions."

Geithner has been under fire for his actions during the bank bailouts of last year. He defended himself by saying: "The entire U.S. financial system and all the major firms in the country, and even small banks across the country, were at that moment at the middle of a classic run, a classic bank run."

What took place a year ago is over and done with. During this past year, banks have had a field day, borrowing from the Fed discount window at 0.25% and using the money for in-house trading. Bank coffers swelled and profits followed, allowing bankers to take record bonuses.

During the past year, Geithner did nothing to stop the excessive compensations. In a word, he created his own monster. Now, the bankers are doing pretty much what they want, ignoring Geithner's pleas.

We need some tough measures to put a stop to the bankers' money grab. Can Geithner do it?

It's time for action!

Tags: bonus, executive pay, geithner, inthenews

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Reader Comments (Page 1 of 1)

12-07-2009 @ 11:05AM

clikdawg said...

Rick: How can you close me up? On what grounds?

Captain Renault: I'm shocked, shocked to find that gambling is going on in here!

[a croupier hands Renault a pile of money]

Croupier: Your winnings, sir.

Captain Renault: [sotto voce] Oh, thank you very much.
[aloud] Everybody out at once!

-- 'Casablanca', 1942

12-07-2009 @ 11:34AM

william lindblad said...

Regarding his issue there is another piece of similar nature on the AOL main finance page at present. Should all of these excessive compensation packages continue? Of course not.
However, it seems that the top dogs of AIG have found a course of action - "we will quit". If this bluff is allowed it will set the stage for every copycat executive in this nation.
They have the wrong man in charge of trying to restrict pay packages. Since Lee Iacocco is still alive I suggest the the government hire him instead. His method was simple, fire #1, than see if #2 knew what was going on. If #2 did not, fire him too, and than go down the pecking order until you found the one that did. The one that knew, got to be the new #1.
All in all, the complaints and threats are hollow. Every one of these companies have an executive pecking order and there are plenty of talented people waiting for the chance at the top jobs. I am sure there are many who would assume this function at more reasonable cost.
Actually, it would be a blessing for most of them to simply stay home - albeit sans any large going away presents.