Rewarding failure

As much as I consider the Associated Press (AP) to be part of the leftist state-run media, they occasionally have the temerity to report on things like this:

Govt rewarded bank auditors with big bonuses

The funny thing about this is that the rest of the state-run media, who very often simply reprint AP stories, has been largely silent on this one. Not so when the bonuses were being handed out to bankers and other financial moguls.

During the 2003-06 boom, the three agencies that supervise most U.S. banks — the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the Office of the Comptroller of the Currency — gave out at least $19 million in bonuses, records show.

Nearly all that money was spent recognizing “superior” performance. The largest share, more than $8.4 million, went to financial examiners, those employees and managers who scrutinize internal bank documents and sound the first alarms. Analysts, auditors, economists and criminal investigators also got awards.

After the meltdown, the government’s internal investigators surveyed the wreckage of nearly 200 failed banks and repeatedly found that those regulators had not done enough:

_”OTS did not react in a timely and forceful manner to certain repeated indications of problems,” the Treasury Department’s inspector general said of the thrift supervision office following the $2.5 billion collapse of NetBank, the first major bank failure of the economic crisis.

_”OCC did not issue a formal enforcement action in a timely manner and was not aggressive enough in the supervision of ANB in light of the bank’s rapid growth,” the inspector general said of the currency comptroller after the $2.1 billion failure of ANB Financial National Association

_”In retrospect, a stronger supervisory response at earlier examinations may have been prudent,” FDIC’s inspector general concluded following the $1.8 billion collapse of New Frontier Bank.

_”OTS examiners did not identify or sufficiently address the core weaknesses that ultimately caused the thrift to fail until it was too late,” Treasury’s inspector general said regarding IndyMac, which in 2008 became one of the largest bank failures in history. “They believed their supervision was adequate. We disagree.”

_”OCC’s supervision of Omni National Bank was inadequate,” Treasury investigators concluded following Omni’s $956 million failure.

While the bonuses where handed out during the Bush administration, the story points out that this program continues under the current administration. What happened to our dear leader’s “Pay Czar?” Also unmentioned in the story was the utter failure of these regulatory agencies in the Madoff affair and other Ponzi schemes that cost investors hundreds of millions.

This is just another story in the continuing saga of how the government rewards failure.

Advertisements

One Response to “Rewarding failure”

  1. […] Da Mook Just an ordinary average mook… « Rewarding failure […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: