How does a bank unload some of its riskiest assets?
Zurich, Switzerland-based Credit Suisse has come up with an interesting idea. Use them as bonuses for senior executives.
Bloomberg news service has a story today about such a plan.
Could U.S. banks employ such an idea?
If I have any major financial regrets, the top one of the bunch is taking out a credit card. While they have their purpose, the past eight years have been a barrage of pro-financial institution regulations enabling credit card issuers to legally morph into loan sharks: Witness the 8 percent rate hike I endured in November, so the issuer can recoup losses from other card holders.
Hard to believe anyone in this economy can’t handle doubled payments and interest rates rising from the low teens into the 30s, isn’t it?
Well, those loan sharking days appear numbered, as this story about the Federal Reserve illustrates. Anything that makes it harder for banks – many who issued credit cards to consumers without regard to credit suitability – to make money unilaterally by gouging consumers, despite the free run on the U.S. Treasury many have gotten out of the October bailout, will get nothing but applause here.
But never let it be said that I’m unsympathetic to the plight of financial institutions. Maybe they can start hoarding and speculating in oil to recoup their losses.
There’s more than one way to gouge the American consumer.