This week we take up an issue that’s been around since the 2008 Financial Crisis, and won’t go away – paying bankers (broadly interpreted) so as to get the incentives right from the perspective of their customers, and the taxpayer. The attached articles Fixing Bankers' Pay and Ideas on Curbing Bankers' Appetite for Risk included some unusual claims, and raise some immediate questions. Is getting the incentives right harder or in some way different in banking/financial services than in other sectors? Does paying in stock options not get the incentive right, and if not, why not?
