(700 Billion) Rescue Was Sold Softly to the Street

[sabra]

Source: WSJ

Kashkari Told Financial-Industry Players That Salary Caps Wouldn't Be Too Onerous

WASHINGTON -- As the biggest market intervention in U.S. history made its way through Congress, Neel Kashkari, the Treasury official named this week to run the program, offered assurances to 800 financial-industry players.

Attempts by Congress to make beneficiaries pay for their mistakes, such as placing caps on executive pay, were "quite reasonable" and "a pretty modest hindrance to you," he told them, according to a recording of the Sept. 28 conference call made public on video-sharing Web site YouTube.

The exchange is a rare inside look at conversations between government officials and industry representatives who help shape government policy. To win approval for the rescue package, Treasury had to agree to a number of conditions imposed by lawmakers, such as the pay caps and moves to help homeowners. But to succeed, Treasury must also win the support of institutions healthy enough to revive faltering capital markets.

...

Mr. Kashkari told participants in the call that lawmakers' interest in limiting executive compensation was "emotional" and "probably the most difficult part of the negotiation" with Congress.

When one industry participant said the caps might discourage participation, Mr. Kashkari noted their limited scope, which he called "a pretty modest hindrance to you coming into the program."

Read more: http://online.wsj.com/article/SB122360084563521627.html

[ixion]

1. they get the "soft sell" wet get the shaft

how wonderful for them. :grr:

[Winterblues]

2. Mr. Kashkari noted their limited scope,

Like none really.. Only Golden Parachutes and not regular salary which in most cases is obscene, and in fact a year or two down the line even the Golden Parachute deal will go away..These guys are bitching about taking tax payer money because of make believe regulations. I am beginning to really hate bankers..

[aquart]

3. Actually, you may be wrong about salary.

Bear Stearns kept salary low (by which I mean only a couple of hundred thousand...stop laughing) but paid one exec (and this was years ago) 17 million in bonuses for one year. And that was a single department head.

If the other firms had the same policy, I can see them being quite tense about the caps.