A nice moment from the hearings…
Barney Frank declares, re: bonuses:
This notion that you need some special incentive to do the right thing troubles me.
Then he asks: What is it you’d do differently if you didn’t get a bonus?
It’s a question Frank had been previewing all week. He throws it open to any of the CEOs.
Morgan Stanley’s John Mack is the only one brave enough to hazard an answer. But all he brief historical digression about how the bonus system became established at investment banks.
But Mack acknowledges:
Without question, given the risks we take today, and the size of our bonuses … all that has to be looked at again.
Frank’s conclusion:
So if there were no bonuses, we’d still get our money’s worth.
Sounds about right.