WASHINGTON (AP) — Federal regulators have adopted a plan to ensure that banks’ pay policies don’t encourage employees to take reckless gambles like those that contributed to the recent financial crisis.
The plan, originally proposed by the Federal Reserve last year, was also endorsed by other key banking regulators — the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
The Fed says many banks’ practices have been found deficient in curbing risk-taking.
The regulators won’t actually set compensation. Instead, they would review — and could veto — pay policies that could cause too much risk-taking by executives, traders or loan officers.
