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Another Approach to Compensation
The problems with the traditional model of banker compensation are well known. To simplify, if a trader (or CEO) is paid a year-end cash bonus based on his performance that year (such as a percentage...
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Bankers and Athletes
Bill George, a director of Goldman Sachs, defending the bank’s compensation practices, said this: “The shareholder value is made up in people and you need the people there to do the job. If you don’t...
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“Appalled, Disgusted, Ashamed and Hugely Embarrassed”
No, that’s not someone talking about the banking industry. That’s Howard Wheeldon of BGC Partners (a brokerage firm) responding to Adair Turner’s statement last September that “Some financial...
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Design or Incompetence?
Or both? In late summer or early fall, Citibank was running a promotion: if you opened a new account or moved a certain amount of money to your bank account, you would get a $200 bonus within three...
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Tim Geithner Says to Leave Your Money at Big Banks
But he’s not sure why. During an interview with Mike Allen of Politico, Tim Geithner said that the Move Your Money campaign is a bad idea, but didn’t actually give a reason why. Here’s the whole...
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Fear Mongering, Wall Street Style
By James Kwak Jason Paez points out this Reuters story on the claim that new banking regulations will require an additional $221 billion of capital in the industry as a whole. I would take this a...
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“Please Keep This Valuable Service”
By James Kwak Here’s a letter submitted by a reader, originally from Chase, encouraging her to keep overdraft protection on her checking account. There’s nothing particularly evil about this — banks...
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Big Banks Are More Expensive
By James Kwak From Stacy Mitchell of the New Rules Project, also on the Huffington Post: This is something I’ve long suspected based on anecdotal evidence. According to Mitchell, it’s nothing new: “The...
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Banking Industry: Sicker, More Concentrated
By James Kwak The rapid bounce-back of some of the big banks (notably Goldman and JPMorgan) has overshadowed (at least on the front pages of major newspapers) the continued plight of the banking sector...
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Banks Paying Customers to Take Overdraft Protection
By James Kwak I saw a bank ad in the subway yesterday. Basically, it said: If you set up direct deposit the bank will give you $100. If you set up overdraft protection the bank will give you $25. If...
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“Break Up the Banks”– in the National Review
By James Kwak “Big banks are bad for free markets,” economist Arnold Kling (who usually blogs at EconLog) begins in the conservative flagship National Review, and it only gets better from there. “There...
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The Fourteenth Banker
By James Kwak I wanted to bring your attention to a new blog that could turn out to be very important. It’s called The Fourteenth Banker (here’s why) and it’s hosted and written by a current banker who...
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Reports of Wall Street’s Death
By James Kwak Gabriel Sherman wrote what I would call a hopeful article last week called “The End of Wall Street As They Knew It.” The basic premise is that the end of the credit bubble and the advent...
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Thomas Hoenig Read All of Basel III . . .
By James Kwak . . . and doesn’t like what he sees. In a post for the Harvard Law School Forum on Corporate Governance and Financial Regulation, the former president of the Kansas City Federal Reserve...
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Michael Lewis!
By James Kwak On the title page of my copy of The Big Short, in black ink, it says: “For James Kwak With admiration” And then a scrawl that I take to be Michael Lewis’s signature. (Christopher Lydon...
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So Tom Hayes Is Guilty. Who Else Is?
By James Kwak Tom Hayes was a trader at UBS and Citigroup who was very, very good … at rigging LIBOR. This week, he was convicted in the United Kingdom of conspiring to manipulate the benchmark...
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More Banking Mystifications
By James Kwak Apparently, both parties have platform planks calling for the reinstatement of the Glass-Steagall Act of 1933, the law that separated investment banking from commercial banking until it...
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Wells Fargo and the Cult of the Customer
By James Kwak “An unwavering focus on the customer.” Those words grace the cover of Wells Fargo’s 2014 annual report: The 2015 annual report features this: One can only wonder what the bank’s public...
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