Geithner succeeds in watering down G-20 banking reforms

[girl gone mad]

Goldman's lapdog pays dividends..

http://online.wsj.com/article/SB125214032824888571.html

But while the gathering — a preparatory session for the G-20 leaders’ summit in Pittsburgh later this month — reached agreement on the need for ongoing growth-boosting measures and some regulatory reform, it compromised on the hot topic of bankers’ bonuses.

Curtailing bankers’ pay and bonuses has been seen as key by some countries after the risk-promoting payment culture was blamed for fueling the current financial crisis.

British Treasury chief and meeting host Alistair Darling said that there must be no more cases in which “people are being rewarded for reckless behavior.”

Heading into the talks in the British capital, European countries had pushed for the G-20, which represents 80 percent of the world’s economic output, to enforce an official cap on both individual payouts and collective bonus pots at financial institutions.

Britain supported the general effort to reign in bonuses, but not the cap, while the United States was more intent on pushing its proposal for a global accord to force banks to hold more capital reserves.

In the event, the G-20 agreed to give the Financial Stability Board, an international body established at the London Summit of G-20 leaders in April, the task of drawing up practical proposals that the Sept. 24-25 leaders meeting in Pittsburgh could agree on.

Suggested measures that countries could take included proposed clawback mechanisms to ensure that bonuses are linked to the long-term success of deals and could be forfeited if they fail to deliver over a period of years.

[AdHocSolver]

1. How about making "reckless" behavior illegal? Reimplement Glass-Steagall and bank regulation.

Notice that they don't recommend preventing reckless behavior. They just recommend not paying bonuses if it doesn't work.

[pscot]

2. The high risk financial regime

that blew up the world economy is still firmly in place. The same feckless greed heads who created the system are still in charge. There is a mountain of debt, public and private hanging over us, we're facing an energy crisis and environmental collapse and the S&P is trading at a multiple of 130. There are 30 million people out of work and 1 in 10 mortgages are underwater or in actual default. If everything goes right we may grow by 2% in 2010, or maybe 2011. You don't need a Phd from MIT to figure out that we are way up shit creek in a leaky canoe.

[Po_d Mainiac]

3. Maybe in a bit more than 2 weeks

Turbo T will get "watered on"

It's no coincidence that China is flashing their potentially closed wallet about!