Credit Suisse bankers get toxic bonuses
Troubled Swiss investment bank Credit Suisse is giving its bankers an interesting Christmas bonus. Bankers will receive bonuses linked to risky assets. Stephen Beard reports.
A Credit Suisse sign with Christmas decorations taken on December 2, 2008 in Zurich. (Fabrice Coffrini/AFP/Getty Images)
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Steve Chiotakis: Troubled investment bank Credit Suisse has an idea for compensating its bankers. Just in time for Christmas, it's the toxic bonus. From London, Stephen Beard explains.
Stephen Beard: Credit Suisse bankers will have their bonuses linked to some of the risky assets they bought for the bank. We're talking mortgaged-backed securities and leveraged loans, assets which they cannot put a price on let alone sell. Under the new bonus package, pay outs will depend on whether these assets ever generate a profit. Such products helped trigger the credit crunch. And they led to Credit Suisse alone writing off billions of dollars. Justin Urquart Stewart of Seven Investment says the toxic bonus is a brilliant idea
Justin Urquart: On the basis that people should be responsible for what they're selling. And this is almost a financial version of the old medieval punishment of putting them in the stocks and throwing old fruit and vegetables at them.
Credit Suisse bankers aren't fans of the plan. But they're in no position to complain. The bank is cutting more than 5,000 jobs in the new year. In London, this is Stephen Beard for Marketplace.
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From Portland, OR, 12/19/2008
Brilliant!!
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