May 23, 2011
I’m writing because my family and I were affected by the economic collapse of 2008, and we don’t want it to happen again. We have all our retirement funds invested in stocks and bonds and suffered a huge hit.
Wall Street greed and outrageous pay practices were a major cause of the collapse. One way to change the incentives so they don’t collapse our economy again would be to delay the bonuses for several years, at least five or seven. That way, we’ll know if the loans they made in year one remain good. In the bad days, bankers paid themselves on the volume of loans (mortgages) they generated, not on their quality.
Another would be to insist that, just like banks, investment firms have adequate capital reserves. Leverages should not be allowed over about 30%.
Thank you for considering my comment,
Robert Burch