Fed's Plan on Banker Pay Divides Industry

This article discusses why the banking industry with law makers is divided. Bankers and lawmakers are divided over the Federal Reserve's plan to examine the way that thousands of U.S. banks pay their star employees, and that the Federal Reserve may change that plan. The plan would give the Fed sweeping powers over executives, traders and loan officers in around 5,000 banks but the main focus would be on the top 25 US banks. "The proposal, which was first reported Friday in The Wall Street Journal, will "give [regulators] another opportunity to have someone come in and tell us how to run our business," said Edward Wehmer, chief executive of Wintrust Financial Corp., a Lake Forest, Ill., company with about $11 billion in assets and 79 branches. "It's opening Pandora's box," he said." On the opposite side of the argument, "others in the business applauded the Fed's plan, saying it wouldn't affect banks with prudent pay practices. "I like it," said Steve Steinour, chief executive of Huntington Bancshares Inc., Columbus, Ohio. "Having disciplined pay practices is good for the country long term," he said. "I do believe people should be paid with a view of how much risk they're taking.'"Regulators wouldn't set the pay for people but if necessary they could makes to salary or bonus policies to ensure negative incentives do not arise.This is an important article in regards to changes that may take place in the banking industry and the changes that might occur in the economy as a result.