May 31, 2011
Elizabeth Murphy
100 F Street, NE
Washington, DC 20549
Dear Murphy,
The economic collapse of recent years is due in large part to a Wall Street and banking culture sometimes known as "The Notorious IBG"--the attitude that it does not matter what risks I take for short term gains, because by the time the chickens come home to roost "I'll Be Gone"--I'll have taken the money and run. The people taking these risks knew they would never pay for the long-term consequences of their actions. We need tough rules so that Wall Street pay packages don't encourage short-term risk taking.
Your rules should require at least a five year deferral period for executive bonuses at big banks, ban executive hedging of their pay packages, and require specific details from banks on precisely how they ensure that executives will share in the long-run risks created by their decisions. It should apply to the full range of important financial institutions, and draw in all the key executives at those companies.
Once this rule is passed, only you will know the details of its enforcement. But it's important for the public to know the progress you are making on this vital issue. You should report back to the public annually with a detailed report on progress in creating accountability for Wall Street pay.
Referencing Docket No.'s:
OTS: RIN 155-AC49
OCC: RIN 1557-AD39
Fed: RIN 7100-AD69
SEC: RIN 3235-AL06
FHFA: RIN 2590-AA42
FDIC: RIN 3064-AD56
Sincerely,
Mrs. Theresa Rieve