Fed plans to approve banking salaries: report

http://ca.news.finance.yahoo.com/s/18092009/24/f-afp-fed-plans-approve-banking-salaries-report.html

NEW YORK (AFP) - The Federal Reserve would be required to approve
salaries for tens of thousands of US bank workers, as part of a plan
to curb risk-taking at financial institutions, The Wall Street Journal
reported Friday.

"The Fed's plan would, for the first time, inject government
regulators deep into compensation decisions traditionally reserved for
the banks' corporate boards and executives," the report said.

The proposal would see the Fed empowered to ban any compensation
policies it believes encourage bank employees -- from chief
executives, to traders, to loan officers -- to take too much risk.

"Bureaucrats wouldn't set the pay of individuals, but would review
and, if necessary, amend each bank's salary and bonus policies to make
sure they don't create harmful incentives," the report added.

A final proposal "is still a few weeks from completion and could be
revised along the way," the report said citing unnamed persons
familiar with the matter. The move requires a vote by the Fed board,
but not a Congressional green light.

"The US' largest banks, about 25 in number, would get especially close
scrutiny. The central bank intends to compare these banks as a group
to see if any practices stand out as unusually dangerous to their
firms," the report added.

In the United States, Wall Street banks rescued in the 2008 financial
crisis paid bonuses regardless of their performance, according to a
report by New York Attorney General Andrew Cuomo.

And the report found that some banks bailed out by the US government
paid executives bonuses that totaled more than entire company profits
last year.

Executive bonuses have generated public outrage and are a flashpoint
issue for the G20 leaders to address at a summit in Pittsburgh next
week.

France and Germany, Europe's leading economies, are lobbying for
strict limits on executive's compensation.