Fed calls for review of banks' compensation structures

Federal Reserve Chairman Ben Bernanke said Thursday that the central bank intended to review bankers' bonuses. The Fed seeks to avoid the incentivization of excessive risk-taking. Industry observers praised the move. "The Federal Reserve is working to ensure that compensation packages appropriately tie rewards to longer-term performance and do not create undue risk for the firm or the financial system," Mr. Bernanke said. "From a banking standpoint, their proposal is correctly focused on eliminating compensation practices that cause employees to take excessive risk," said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable.

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