Barack Obama looking to set up new US financial regulator
Barack Obama has today confirmed plans for a new US watchdog to keep an eye on the financial services industry in the future. This comes at a very tricky time for the US president with Timothy Geithner (Treasury Secretary) summoned to appear before Congress in relation to substantial bonuses paid to AIG employs over the last few months.
In a situation which bizarrely reflects the UK saga with the Royal Bank of Scotland, $165 million in bonuses were paid to AIG staff out of the substantial taxpayer pool which funded the
bailout of the company. Serious questions are being asked as to how significant amounts of taxpayer's money could be used to cover bonuses and other discretionary payments at a time when the industry is under serious pressure.
There seems to be a worldwide clampdown on financial bonuses and discretionary payments which look very good in the public relations stakes but does it really assist the industry going forward?
There is no doubt that the vast majority of superstars working in the financial services industry are motivated by money and go wherever the money is. If the likes of the US and UK look to limit their potential income there is every chance they will look elsewhere for their rewards.
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