Wall Street, We Are Watching You

Floor Speech

Ms. KAPTUR. Mr. Speaker, this week, The New York Times reported that Credit Suisse, the largest Swiss bank, stated how it will overhaul compensation for its banking executives. The changes go into effect in January and include their compensation for 2009 and 2010.

Importantly, Credit Suisse ties compensation and bonuses to the firm's future performance and return on equity. In other words, if your decisions yield solid performance, you will be rewarded on that, not on arbitrary bonuses taken just because you can. I'd like to commend Credit Suisse's experience to other big banks in our country. We should follow suit in an even more rigorous reimposition of discipline.

By contrast, in a speech on September 9, 2009, Goldman Sachs' Chief Executive Officer Lloyd Blankfein put forth some principles on compensation. We asked when Goldman Sachs was going to implement those changes; we haven't heard back. But Credit Suisse already did it; they did it in line with the principles established by the G-20 in Pittsburgh earlier this year.

In their press release, Credit Suisse reaffirms the bank's commitment to fair, balanced, performance-oriented compensation policies that align long-term employee and shareholder interests.

So, once again, Wall Street could have led the charge and embraced, for the sake of our Nation, reforms of employee compensation which rewarded short-term gains and encouraged excessive risk-taking as well as increased moral hazard. Instead, Wall Street stood up only for themselves again, first, last, and always. They simply have too much power.

Moreover, Credit Suisse's approach claws back bonuses if the banks perform poorly. Why should America accept that if a bank performs poorly, that bonuses should be paid out when our taxpayers' money is propping them up and at risk? In particular, if the government saved your bank and therefore your pay despite your poor performance, why should you get a huge bonus? It makes no sense.

Congress and the administration, by allowing huge bonuses in the wake of huge bailouts, have ceded our people's power to Wall Street. These individuals are making three, four, five, six--10 times as much as the President of the United States.

Today, Obama pay czar, Kenneth Feinberg--who was not vetted by the Senate through normal procedures--is supposed to address this situation for our country. Feinberg is expected to cut the average pay only of the top earners at the seven bailed out firms, AIG, Bank of America, Citigroup, General Motors, Chrysler, GMAC, and Chrysler Financial. Remember, the American taxpayer saved them all--for example, they saved Citibank from its downfall. So their jobs were saved, their companies were saved by us, yet they get bonuses?

Some say we would be a lot worse off if this lopsided approach had not been imposed, but far too many Americans find it hard to imagine that as they have lost their jobs, their homes, their access to credit, their sense of hope, and their self-respect. Meanwhile, they see Wall Street titans enriching themselves even more and the biggest banks getting even bigger. That's what is happening across our country.

Wall Street should have been leaders for our republic, helping the Americans whose money saved them, but their culture of ordinary greed continues to stampede forward. They simply don't care about the rest of us. The distance between those elites and our people are growing, and with each step the have-nots suffer more and pay for those that have far too much.

Amidst the compensation fiasco is the core problem: These megabanks are too unaccountable and too big--some call them ``too big to fail.'' As many have said, those institutions too big to fail are actually too big to exist. It's time to break up the biggest banks, sell off their healthy parts, and never let another bank or financial institution become too big to fail. Wall Street comeuppance is long overdue.

Main Street USA is paying close attention to your shenanigans. We don't intend to take the spotlight off until justice prevails and the stampeding bulls are put back in very tight cages.

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