FDIC proposes increased fees for banks with ‘risky’ pay practices
14 Jan 2010
The Obama administration appears to be readying to take on take a swing at payout to Wall Street bankers. While the administration wants to tax it, the Federal Reserve is aiming to tweak it and the Federal Deposit Insurance Corporation (FDIC) wants to structure it.
The volley of proposals, particularly president Obama's propsal of levying a tax on big banks to recoup billions of dollars in federal aid, has left many banks confused.
According to industry experts, and also a few government officials, the plans being mooted are at odds with one another or with policy goals like encouraging banks to make more loans.
In the latest move Sheila C Bair, the head of the FDIC, has proposed imposing increased fees on banks with pay practices that the agency considers risky. The FDIC, which safeguards bank deposits, is however not seeking a cap on pay.
''We're not talking about levels, notwithstanding my dismay,'' Bair said at a news conference. ''This is about structures.''
The FDIC board, by a 3-2 vote, has approved a preliminary plan to tie the fees that the FDIC charges banks to fill its insurance fund to the banks' compensation practices.
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