STOCK MARKET WATCH -- Monday, 25 March 2013

[Demeter]

2. Fed pushes banks to ignore rivals when setting bonuses YEAH, THAT'LL WORK

http://news.yahoo.com/exclusive-fed-pushes-banks-ignore-rivals-setting-bonuses-191416744--sector.html

The Federal Reserve is pushing banks to ignore competitors' performance when awarding bonuses, and focus squarely on their own profitability, according to pay consultants and other people familiar with the matter.

The central bank is hoping to change a deeply ingrained habit on Wall Street: awarding bonuses to senior executives based in part on whether the company's performance lagged or beat rivals.

The Fed fears that these relative performance measures encourage executives to take big risks to keep up with stronger competitors and reward executives even when their banks aren't performing well, the sources said. Regulators also fear that banks may be paying executives large sums at precisely the time when they should be reining in compensation to conserve capital.

The Dodd-Frank financial reform law charged the Fed with implementing new rules about Wall Street pay. At this point, the Fed is just talking to banks, and has not yet issued formal rules or directives...

THE FED IS SCARED TO REGULATE THEIR BUDDIES AND THEIMSELVES