Wall Street Bonus Rules Should Be Revisited at Fed, Raskin Says
(Bloomberg) -- Sarah Bloom Raskin said she's keen to revisit sweeping limits on Wall Street bonuses if she is confirmed to be the Federal Reserve's top banking watchdog.
Regulators have tried unsuccessfully several times to write wide-ranging rules to rein in bonuses at financial firms, which was required by the 2010 Dodd-Frank Act. Raskin said she's committed to working with other regulators to restart those efforts as the Fed's vice chair for supervision.
“That deadline has happened, and still there is no rule,” she said Thursday, in response to a question from Senator Bob Menendez, a Democrat from New Jersey, during her confirmation hearing. “I would work to implement the law.”
Bonuses on Wall Street have surged during the pandemic. Not since the late 2000s, when lavish bonuses rained down before and after federal bailouts, have pay packages at U.S. investment banks swelled as much as they have right now.
Read more: Big Bonuses Bring Back Good Old Days for Wall Street Rainmakers
Raskin declined to say that she would make bonuses a priority this year, and wants to look into why the rule has been delayed if confirmed for the Fed job. The bonus rules were among some of the most controversial regulations stemming from the financial crisis and are aimed at clamping down on executives being rewarded for taking inappropriate risk.
EXPLAINER: Why Bank Bonuses Are Still Big, Still a Touchy Topic: QuickTake
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