Bank Salary Socialism Set to Arrive Shortly

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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.

I’m sure the “Federal” Reserve will do just as efficient a job at regulating bank salaries as it has done in stabilizing the U.S. dollar for the past 96 years.

[Thanks to Travis Holte]

8:08 am on September 18, 2009