{"id":17154,"date":"2014-05-20T04:10:27","date_gmt":"2014-05-20T02:10:27","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=17154"},"modified":"2014-05-20T04:10:27","modified_gmt":"2014-05-20T02:10:27","slug":"using-executive-pay-to-take-the-risk-out-of-banking","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/using-executive-pay-to-take-the-risk-out-of-banking\/","title":{"rendered":"Using Executive Pay to Take the Risk Out of Banking"},"content":{"rendered":"<p>Making banks more secure has become the holy grail of regulators <a href=\"https:\/\/www.project-syndicate.org\/commentary\/mark-roe-proposes-a-strategy-that-would-force-bank-managers-to-prioritize-stability-over-profitability\" target=\"_blank\">writes<\/a> Mark Roe.<\/p>\n<p>Tying senior managers\u2019 pay to the bank\u2019s stability, the financial sector, advocates argue, would be forced to police itself. This incentive-based regulation could bolster economic stability more effectively than expecting regulators to keep pace with banks\u2019 risky activities.<\/p>\n<p>The proposal is not perfect \u2013 not least because bank managers\u2019 compensation would still be tied to profits. If a banker is told that he or she will be compensated entirely in bonds this year, with the bank\u2019s annual profits determining the number of bonds to be received, the banker would obviously want to boost this year\u2019s profits \u2013 even if it required taking bigger risks.<\/p>\n<p style=\"text-align: left\">Despite these challenges, a new, bond-based compensation strategy could enhance bank stability considerably. Though there is no silver bullet for bank regulation, implementing such a system with care and vigilance would be an important step in the right direction.<br \/>\n<a href=\"http:\/\/www.w-t-w.org\/en\/using-executive-pay-to-take-the-risk-out-of-banking\/bonds-2\/\" target=\"_blank\" rel=\"attachment wp-att-17155\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-17155\" src=\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/05\/Bonds.jpg\" alt=\"Bonds\" width=\"261\" height=\"295\" \/><\/a><\/p>\n<p style=\"text-align: center\">\n","protected":false},"excerpt":{"rendered":"<p>Making banks more secure has become the holy grail of regulators writes Mark Roe. Tying senior managers\u2019 pay to the bank\u2019s stability, the financial sector, advocates argue, would be forced to police itself. This incentive-based regulation could bolster economic stability &hellip; <a href=\"https:\/\/www.w-t-w.org\/en\/using-executive-pay-to-take-the-risk-out-of-banking\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-17154","post","type-post","status-publish","format-standard","hentry","category-finance"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/posts\/17154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/comments?post=17154"}],"version-history":[{"count":2,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/posts\/17154\/revisions"}],"predecessor-version":[{"id":17157,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/posts\/17154\/revisions\/17157"}],"wp:attachment":[{"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/media?parent=17154"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/categories?post=17154"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/tags?post=17154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}