FDIC Chair Sheila Bair has it right: It’s time to change bankers’ incentives

Filed under: Economy , Investing I have to hand it to FDIC Chairwoman Sheila Bair — the former UMass economics professor gets it right on key policy issues. She is right about ending the doctrine of too-big-to-fail , and now she is proposing an idea that I’ve been pushing with no effect for years. That idea is to align the interests of the banks that bundle assets and sell them as securities — so-called asset-backed securities — with those of ABS investors. Before getting into the details of her proposal, I should disclose that I am not entirely objective in analyzing it. I worked with the FDIC back in the early 1980s to help build a system to manage the liquidation of the assets the FDIC gets when it helps find partners to absorb failed banks. And I have posted repeatedly about the idea of putting bankers’ pay in escrow as a way to align the interests of those who create investments with those who buy them. Continue reading FDIC Chair Sheila Bair has it right: It’s time to change bankers’ incentives FDIC Chair Sheila Bair has it right: It’s time to change bankers’ incentives originally appeared on DailyFinance on Sun, 22 Nov 2009 14:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments

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FDIC Chair Sheila Bair has it right: It’s time to change bankers’ incentives

Tagged with: a-friend-via • about-the-idea • abs • debt • entry • fdic • gets-it-right • interests • jobless • meltdown • recession • retire • sheila bair • sheilabair

Filed under: Business News

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