Poetic Justice in the Financial Crisis
Bloomberg reports that Credit Suisse has decided to pay managing directors’ and directors’ bonuses in the form of an ownership interest in the bank’s toxic mortgage-backed assets. The value of these assets will emerge over the next eight years as the assets mature or default. This is outstanding! The executives have to lie in the bed they made. Of course, this would have been better if they did this prospectively back when the executives were the making decisions that created these securities. But perhaps banks will adopt some sort of similar long term performance measurement mechanism going forward.