“The new international rules “will allow market participants to assess the quality of a bank’s compensation practices and the incentives towards risk-taking they support,” said Fernando Vargas.”
It’s not the added regulation, it’s the fact that all these banks got bailout using tax payers money that should be the focus. If government did not bail them out, things would revert to mean by now. When will government learn? Get rid of those lobby groups and downsize all these government agencies. The key is that they don’t intend to “learn,” and they intend to keep siphoning funny money from the public purse to private central bankers while fooling you, the peons, that the answer is more regulations. Pure genius.
The other thing we should focus on right now is how much all these so called developed countries will be borrowing in 2011 just to pay interest. Indeed, what a mess we are in after letting central banks run a compounded 2 percent inflation per year. After over 30 years, we now have inflated prices of over 60 percent!
We can read that we are to be left with the impression that the BIS is taking the bull by the horns and wrestling the rampaging bankers bonus excesses to the ground. The only problem is that the BIS can not impose any resolutions, only make “proposals”. As such, it is “neutered”.
All this talk of curbing bonuses is a distraction anyways. It is only meant to placate the people while the real scam continues unabated. As long as the debt as money ponzi scheme being run by the private central banks is allowed to persist, we will suffer the consequences.
New global banking rules proposed on bankers’ pay source (1)
New banking rules are being proposed by an influential global regulatory panel that would give investors a better idea of when CEOs and other high-paid executives get bonuses even when their companies are lagging.
The panel affiliated with the Bank for International Settlements in Basel said its proposal Monday would require banks to reveal whether a bonus is linked to a firm’s performance and to provide other details aimed at preventing lenders from hiding irresponsible risks.
The new international rules “will allow market participants to assess the quality of a bank’s compensation practices and the incentives towards risk-taking they support,” said Fernando Vargas, chairman of the Basel Committee on Banking Supervision’s task force on remuneration and an associate director-general at the Bank of Spain.
Vargas said his panel’s proposal also would promote “greater convergence and consistency of disclosure on remuneration” by requiring lenders to publicly provide details of their risks and capitalization.
Some bankers have expressed skepticism of having to go beyond what regulators already require, but the Basel committee said its latest proposal would “add greater specificity” to previous guidance on how much banks should have to disclose publicly.
It also said it recognized that the proposal may not be relevant to all banks, particularly those not big enough to have a remuneration committee.
The Swiss-based Bank for International Settlements, an intragovernmental organization of central banks, recently has been setting more stringent rules intended to boost banking and lending fitness over the long haul.
Where do banks get credit from? it used to be that someone lent a bank their savings representing real production in the form of money. Entrepreneurs would go to a bank and borrow these savings and the bank would win a percent on the spread. The lender would see his lack of consumption and hard work turned into profits as an interest return on his lending.The business would grow because of this capitalization and would employ more people making things that people needed. Bank wins, company wins,worker wins,consumer wins,country’s GDP grows, society gets wealthier.
Now it’s completely different as government prints money, gives it to the bank to lend out to business and consumers. Wait a second. We know that a bank is a business and they have a basically limitless supply of credit to supply the economy. Might it be now not in their interest to lend, or lend now to the wrong people who are not producing — gambling essentially — call it deposit insurance[Moral hazard]. Do you or can we make now a distinction between how it should work and the way the western world is now in a perpetual state of bubbles that never unwind and failure and gambling are making bankers rich?