Item 1:
The “I.B.G. – Y.B.G.” problem. A major cause of the current crisis will most likely prove to be a mismatch of incentives for Wall Street traders. If a mortgage trader made a big bet, he had the chance to land a big bonus if it paid off (and his boss did, too). If, however, that bet didn’t pan out — and the trader lost a lot of money for the firm — he might receive no bonus at all. On the contrary, he might get a princely severance package.
No comments:
Post a Comment