The Government Puts Its Finishing Touches on Control of the Banking System

From NYT:

The Federal Reserve is preparing what would be the most sweeping rules yet to regulate the pay at banks across the country, people close to the discussion said Friday.

The rules would apply not just to the pay and bonuses of top executives but also to traders, loan officers and other employees...

Fed officials are expected to have a two-tiered system of supervising pay, using different approaches for about 20 of the nation’s biggest bank holding companies on the one hand, and for thousands of medium and smaller banks on the other.

The biggest money-center banks would get the closest supervision, though Fed supervisors would give individual institutions considerable flexibility in how they design their compensation plans.

The big bank holding companies, like JPMorgan Chase or Goldman Sachs (which converted itself into a bank holding company at the height of the crisis), would present their compensation plans to Fed supervisors, who would then evaluate each plan to see if the pay incentives properly balance goals of short-term sales and production against long-term risk-taking.

Bank supervisors would have the authority to demand changes in the pay packages, and they would monitor pay practices to make sure they conformed with what the banks had pledged to do.

Government influence over the banking system is near complete. How long before Fed supervisors demand pay structures based on how much bank money is being made available to Obama favored industries?

This is not your grandfather's America.