The system of compensation almost surely contributed in an important way to the crisis. It was designed to encourage risk-taking—but it encouraged excessive risktaking.
In effect, it paid them to gamble. When things turned out well, they walked away with huge bonuses. When things turned out badly—as now—they do not share in the losses. Even if they lose their jobs, they walk away with large sums.
Friday, May 15, 2009
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment