Nevetheless, there comes a point where pay hits a level that simply incentivizes excessive risk taking.
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The Chairman was forced to address the issue of credit markets overheating, creating excessive risk-taking.
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Citigroup has run into problems when former chief executives set goals that led to excessive risk-taking.
Tighter regulation in one bit of finance may push excessive risk-taking into unregulated areas.
Michel Barnier, the EU commissioner for the single market, said high bonuses were behind excessive risk-taking by bankers.
How does Galinsky suggest we prevent ourselves from falling into the dual traps of unethical behavior and excessive risk-taking?
Credit-rating agencies should be reformed, incentives for excessive risk-taking reduced and bankers' bonuses paid on the basis of long-term performance.
"Future prosperity will always be undermined by corruption, excessive risk-taking, a lack of transparency and other unethical practices, " she warned.
But they do have regulatory policies that can and should be used to prevent excessive risk taking in the banking system.
These small businesses were some of the worst victims of the excessive risk-taking on Wall Street that led to this crisis.
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The effect is robust over time, economically significant, unlikely to be caused by data-mining, and is not related to taking excessive risk.
Likewise, investors that tip the scale in favor of guts over brains take on excessive risk without a rational, thought out plan.
Collateral requirements, like those on futures exchanges, might deter excessive risk taking.
But they have their dark side as well, Galinsky says, two in particular: They can encourage both excessive risk-taking and unethical behavior.
The effect would be to claw back profits earned by excessive risk-taking.
Pay packages will have to be designed to prevent excessive risk-taking, which may involve deferring as much as 60% of managers' bonuses.
If the possibility of large bonuses indeed generates excessive risk-taking, then bank stakeholders have ample incentive to adopt such limits without government coercion.
The global investment banking system was nearly brought down by excessive risk-taking and fraud in retail lending on both sides of the Atlantic.
But Lamberts says he is not "overly concerned" if the banker flight rids the European financial sector of excessive risk and circumvention of banking regulation.
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The problem is when excessive rewards start driving excessive risk taking.
Actions such as selling credit default swaps based on rotten loans, money laundering, interest rate manipulation, and excessive risk-taking can be as objectively determined as financial restatements.
The firms said the policy isn't new, but the disclosure shows the companies won't just go after the excessive risk-takers if bad trades hurt the firms' profits.
Finally, knowing that the feds will bail out broken pensions will free sponsors and their portfolio managers to take excessive risk in the hopes of realizing higher returns.
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"Our imperative is to protect savers and not those who run the financial institutions, particularly those who took excessive risk or those who took bad decisions, " she said.
The issues of excessive risk-taking by financial institutions too big to fail, and the broader regulatory effort is totally central to the white paper that we released in June.
As taxes go, a VAT is one of the least offensive, and a levy on bank balance sheets that penalizes excessive risk can in principle reduce the likelihood of panics.
The IMF's view, broadly speaking, is that without excessive risk-taking by financial institutions, which was aided by the absence of regulation, imbalances would not by themselves have caused the meltdown.
It was that we turn a corner away from the type of excessive risk-taking that got us into having to ask the taxpayers to loan banks hundreds of billions of dollars.
Financial services are so globalised that it probably requires the International Monetary Fund to make new taxes on bonuses and financial transactions effective, along with other measures to curb excessive risk-taking.
In a joint statement, the US Federal Reserve and other major US banking regulators said the deal "provides for a more stable banking system that is less prone to excessive risk-taking".
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