Although the USA has its own special political and economic issues, it is worth noting how President Obama has responded to the latest round of bank executive bonuses by firstly proposing to limit the banks’ ability to own, invest in or sponsor a hedge fund or a private equity fund and secondly to limit the consolidation of the financial sector.
The President’s comments are worth reading in full here. They are very emotional ending with:
So if these folks want a fight, it’s a fight I’m ready to have. And my resolve is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see soaring profits and obscene bonuses at some of the very firms claiming that they can’t lend more to small business, they can’t keep credit card rates low, they can’t pay a fee to refund taxpayers for the bailout without passing on the cost to shareholders or customers — that’s the claims they’re making. It’s exactly this kind of irresponsibility that makes clear reform is necessary.
We’ve come through a terrible crisis. The American people have paid a very high price. We simply cannot return to business as usual. That’s why we’re going to ensure that Wall Street pays back the American people for the bailout. That’s why we’re going to rein in the excess and abuse that nearly brought down our financial system. That’s why we’re going to pass these reforms into law.
The Australian Government is currently deciding on its response to the Productivity Commission Report on Executive Remuneration and it will be interesting to see whether it adopts similar language.