New Fed and FDIC Rules to Evaluate Executive Risk

HousingWire reports the Federal Reserve has proposed a rule to tie the risks that heads of financial institutions take to their compensation packages.  The rule applies to institutions with one billion or more in assets, and is also part of the Dodd-Frank Act.  Lawmakers wanted to examine executives who put their companies at substantial risk by acquiring bad mortgage debts.  In addition, the large institutions would have to provide their federal regulator with an annual report describing their formula for determining incentive pay.  A recent rule from the Federal Deposit Insurance Corporation (FDIC) would allow it to take back income from executives of banks that have failed.  There is a 45-day public comment period for the new rules.

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