Fed Shoots a Regulatory Shot... But it's Just a Blank
Tools? We have tons of them. Don't call the Fed impotent, you pricks, they have plenty of tools at their disposal even though ZIRP looks likely to stick around for quite some time.
Oooh. Regulation and the Fed. Two of my favorite subjects in one delicious package of FAIL. I'm getting excited.
Someone give them some porn mags.
WaPo (who should be on JDA Watch right now for covering that ridiculous "racism" bullshit but I'll give them a pass because I have other things on my mind and can't entirely focus on this ridiculousness much longer):
The Federal Reserve is moving to restrict compensation practices at the nation's banks, expanding its regulatory reach to oversee how tens of thousands of bank employees ranging from chief executives to loan officers are paid.
The Fed, acting under its existing powers as a bank regulator, aims to curtail pay practices that can encourage bank employees to take the kinds of irresponsible risks that may have led to the financial crisis. It is not seeking to set caps on the amount any individual employee can be paid, said sources familiar with the plans.
Fed officials and many private analysts have concluded that pay practices emphasizing short-term performance contributed to the near-collapse of the financial system last year.
For example, a trader who receives bonuses based solely on one year's performance might make bets that pay off in the short run but cause vast losses in the long run. A loan officer paid only based on the volume of loans issued might not pay enough attention to the quality of those loans. Under the approach envisioned by the Fed, the two dozen or so largest banks would have to explain these pay practices to their regulator, and adjust them if examiners think they endanger the safety and soundness of the bank, said the sources, who spoke on condition of anonymity because the policy is not yet final.
Some critics viewed the expected new regulations as a form of mission creep by the central bank, as it is being undertaken without explicit authorization from Congress. It comes as the Fed is facing extreme political pressure, under fire for its efforts to stabilize the financial system and for regulatory failures in the years before the crisis -- and as Chairman Ben S. Bernanke is up for Senate confirmation for a second term.