Nicolas Sarkozy: Regulate All Finance

LONDON -- For the second time in only five months, the leaders of the world's top 20 economies are meeting to seek a joint response to the unprecedented global economic crisis that we are going through.

Since this crisis first began, I have advocated the idea that, when faced by a challenge of this magnitude, cooperation is a necessity, not an option. Already in September 2008, speaking to the United Nations General Assembly, I called upon the world to rally together to meet the crisis with a response based on coordination and cooperation. Brought forward in concert by the European nations, that initiative led to last November's G-20 meeting of heads of state and government in Washington, which laid the foundations for far-reaching reform of the international financial system. The London Summit must now enable us to go further, and to put into practice the principles that we established in Washington.

The world expects that we speed up the reform of the international financial system. The world expects that we rebuild, together, a new form of capitalism, better regulated, with a greater sense of morality and solidarity. This is a precondition for mobilizing the economy and achieving sustainable growth.

This crisis is not the crisis of capitalism. On the contrary, it is the crisis of a system that has drifted away from the most fundamental values of capitalism. It is the crisis of a system that drove financial operators to be increasingly reckless in the risks they took, that allowed banks to speculate instead of doing their proper business of funding growth in the economy; a system, lastly, that tolerated a complete lack of control over the activities of so many financial players and markets.

At the Washington summit last November, we agreed on the four principles that would guide our response to the crisis: the need for enhanced coordination and cooperation, the rejection of protectionist measures, the strengthening of regulatory systems in financial markets, and a new global governance.

What has been achieved to date? On the first two points, we have made a good deal of progress. We have managed to hold off the specter of protectionism, which, as history has taught us, inevitably compounds existing difficulties. Likewise, all nations have injected massive support for their economies, engaging in ambitious stimulus programs, while those countries that, like France, offer their citizens a high level of social protection have also significantly increased their levels of crisis-related welfare spending. Overall, taking into account all of these measures of support, the world's leading economies have made comparably gigantic efforts in response to the crisis. These measures are only now beginning to take effect and produce tangible benefits, but we must be ready to do even more if circumstances require it.

This is the principle I will be defending in London: to do everything necessary for world growth.
This week, however, we must also attach the same level of priority and sense of urgency to making progress on the issue of regulation of financial markets. World growth will be all the stronger for being sustained by a stable, efficient financial system and by the kind of renewed confidence in the markets that will enable resources to be better allocated, encourage lending to pick up again and allow the return of the flow of private investment capital toward developing countries.

The Washington Summit enabled the establishment of several basic principles regarding regulation that must now be put into practical effect. We decided that in the future not one financial player, not one institution, not one product would be beyond the control of a regulatory authority. This rule must be applied to credit rating agencies, but it should also apply to speculative investment funds and, of course, to tax havens.

On the latter point I want us to go very far indeed, adopting a resolution that clearly identifies these tax havens and sets out in detail both the changes we expect them to introduce and the consequences that will ensue, should they fail to respond accordingly. I may add that I am pleased to observe that the debate on tax havens initiated by the Washington Summit has already begun to bear fruit, in particular in Europe, where several countries have recently announced their intention to introduce legislative changes in response to the expectations of the international community.

I also hope that we will make progress with our joint reflection on the necessary reform of the required disclosure standards and levels of prudential oversight for financial firms. The current regulations failed to prevent abuses. They even made the crisis worse. I shall be putting this aspect to the fore, since sadly in many countries it has not been getting the attention it deserves.

With regard to the reform of global economic governance, it is my long-standing belief that we must offer much more space to emerging nations, in keeping with their real weight and with the responsibilities I would like to see them taking on. This holds true for all international bodies, but especially so for international financial institutions. I am particularly pleased by the expanded membership of the Financial Stability Forum. We must go even further in the future.
Looking beyond the London Summit, in my view there will remain the task of pursuing a process of renewal throughout the entire multilateral system. I shall be making some proposals in this regard over the coming months.

Lastly, we must provide answers to the problems of those who have been hit hardest by the impact of the crisis. This is why we must raise the level of funding we make available to the International Monetary Fund, so that it can aid those countries facing the most serious difficulties. I have taken up at the EU level the question of our contribution to the IMF: The Member States were ready and willing. I have also taken up at the EU level the question of our contribution to the risks that certain countries in Central and Eastern Europe are exposed to: Again, the Member States were ready and willing.

I would also like to emphasize the need, the absolute necessity, for us to offer our support to the poorer nations. They are the victims of this crisis. Some now face the real risk of seeing their considerable efforts in recent years toward achieving the U.N. Millennium Development Goals be completely nullified, if we do not show solidarity. A few days ago I was in Africa. While there, I stated my belief that the destinies of Europe and the African continent are inextricably linked. We will be ready and willing to stand by Africa and by all developing nations in difficulty, on every continent.

I remain convinced that the world can emerge from these troubled times stronger, more united and with a greater sense of solidarity than before, provided we have the will to do so. I am fully aware that we cannot achieve radical change overnight, that there is still a long way to go and that there may well be a need for other meetings, after London, in order to implement the reforms undertaken. I am certain, however, of the need to achieve practical results already this Thursday in London. Failure is not an option; the world would not understand it and History would not forgive us for it.

Torture... Where is the Outrage?

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Geithner pushes his financial reforms on Capitol Hill

The Treasury secretary’s plan aims to rein in the industry’s boom-bust cycle and soothe Europe ahead of the G-20 summit. The push to remake the financial industry’s rules of the road in hopes of softening future boom-and-bust cycles gathered momentum this week with Treasury Secretary Timothy Geithner urging Congress Thursday to create new systems to monitor and control risks.
So far in the financial crisis, Washington has acted mainly to contain the immediate damage to the economy. But any deeper fixes could also yield results quickly.
By signaling a receptivity to increased regulation – a key European demand – the announcement might strengthen President Obama’s ability to nudge Germany and other nations on a US priority at next week’s meeting of the Group of 20 leaders: expanding government spending as an economic stimulus.

Federal agencies would also have new authority to intervene at large, troubled financial institutions like AIG if parts of Mr. Geithner’s plan are enacted into law.
Longer term, clarifying potential reforms could lift economic confidence. “It is important, because, let’s face it, we got into this because of regulatory issues,” says David Wyss, chief economist at Standard & Poor’s in New York. “It’s not going to be easy.”

Among the controversial points that Congress will wrestle with: What body should be empowered to be the watchdog of major risks to the financial system?
One leading candidate for the job is the Federal Reserve. But the Fed already has the major mission of setting monetary policy – and being a so-called lender of last resort in financial crises. Also, the Fed is coming in for its share of criticism in Congress lately for some of its actions during the crisis.
An alternative is to set up a new entity to do the job. Either way, this new role would come on top of – not as a replacement for – other agencies overseeing parts of the financial industry.

Geithner’s goals
Appearing before the House Financial Services Committee on Thursday, Mr. Geithner outlined key goals for regulatory reform. “The system proved too unstable and fragile, subject to significant crises every few years, periodic booms in real-estate markets and in credit, followed by busts,” Geithner said. “These failures have caused a great loss of confidence in … a system that over time has been a tremendous asset for the American economy.”
He outlined four broad areas reforms will cover. They include protecting consumers and investors, eliminating gaps in the regulatory structure, and enhancing the coordination of rules in a more global economy.

Systemic risk
The fourth area of reform, addressing “systemic risk,” was his focus Thursday. He proposed:

•Naming a single entity to track systemic stability across all sectors of financial activity.
•Creating a resolution mechanism for important nonbank firms, so that they can be assisted or shut down, if needed, outside of traditional bankruptcy.
•Tightening the capital requirements for large financial firms so that they would rein in cyclical tendencies. During a boom, firms would have to set aside more reserves, as a way to curb excesses and provide a cushion for bad times.
•Requiring large hedge funds and other private-investment funds to register with the Securities and Exchange Commission (SEC) and be more transparent to regulators regarding their leverage – or borrowing – and risk.
•Establishing oversight and protections for investments known as derivatives, such as the credit-default swaps that fueled AIG’s collapse.
•Crafting SEC rules to make money-market funds safer, reducing the risk that account holders would panic or face losses in a crisis.

Geithner is the point man in a larger effort by the Obama administration to clarify these goals. Other officials, including Fed Chairman Ben Bernanke, have urged similar steps this month. Mr. Bernanke said the AIG failure could have been handled in a less costly way had the government had the authority to deal with troubled nonbank firms the way the the Federal Deposit Insurance Corp. (FDIC) deals with failed banks. If other firms falter, such authority might prove useful to regulators before this recession is over.

Regulatory reform can be viewed as the final piece of an overall plan that, Geithner says, will succeed over time in ending the credit crisis. When a congressman asked him earlier this week about the whether a Plan B was needed, Geithner responded confidently. “This plan will work,” he said. “We just need to keep at it.”

Where this fits in
There are other parts of the plan, which have been announced in recent weeks. They include reviving the housing market by preventing foreclosures and keeping interest rates low, investing in weak banks so they have enough capital to cope with loan losses, and developing a public-private partnership to buy troubled bank assets that have been a cause of investor uncertainty.

After months of worsening economic news, some recent data have made economists optimistic that the economy may hit bottom later this year. Housing-market news has been less grim, and buyers may be encouraged not only by a first-time buyer’s tax credit, but also by mortgage rates that this week fell to historic lows below 5 percent on 30-year fixed-rate loans.
Meanwhile, the stock market has risen strongly this month, and consumer spending has shown signs of stabilizing after a winter plunge. But it remains unclear whether the Geithner plan will work, and whether banks will be healthy enough to help fuel a strong economic recovery. Mr. Wyss of S&P, for one, doesn’t share Geithner’s level of confidence that current policies will be effective. But “I’m feeling a little more confident today than I was a month ago,” he says.
Financial experts say that moves to improve the regulatory structure should help the functioning of an industry that plays a vital role in the economy – and that has proved subject to abuses. One key step, they say, is to make sure that rules do better at covering broad types of activity across a range of firms. The worst excesses in mortgage lending, for example, arose among less-regulated mortgage brokers with mainstream banks playing a supporting or follow-on role. Another key could be to reform how bankers are paid and given incentives. Geithner made brief reference to compensation, but this is a tricky issue for Congress to address. The goal might be to set guidelines so that pay depends on managing and reducing risks as well as achieving profit goals.

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Dear A.I.G., I Quit!

The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”

Sincerely,

Jake DeSantis

Crazy Michele Bachmann Calls for Armed Revolution

Michele Marie Bachmann (born on April 6, 1956)is the Republican Representative of Minnesota's 6th congressional district. She is the third woman and first Republican woman to represent Minnesota in Congress. She defeated her Democratic challenger, Elwyn Tinklenberg, in the 2008 election in a race that had gained national attention following her controversial televised call for the media to investigate members of Congress for perceived anti-American bias, including Democratic presidential candidate Barack Obama.

It's obviously just rhetoric from overly-excited far-right lawmakers. It's no doubt intended to fire up the activists (and donors) who help Republicans succeed.

But when Rep. Michele Bachmann (R-Minn.) casually refers to elected Democratic officials as the "enemy," and nonchalantly refers to keeping her supporters "armed and dangerous," it's probably a good time to remind Republican lawmakers to turn the temperature a bit. (via the University of Minnesota and the Dump Bachmann blog.)

Bachmann appeared over the weekend on the First Team radio show with John Hinderaker and Brian Ward, speaking about the horrible stuff that the Democrats are doing: "I'm a foreign correspondent on enemy lines and I try to let everyone back here in Minnesota know exactly the nefarious activities that are taking place in Washington."

Bachmann also spoke out against the cap-and-trade proposals currently making their way through Washington, and how she'll be distributing information against it at an upcoming event in the district. "I want people in Minnesota armed and dangerous on this issue of the energy tax, because we need to fight back," said Bachmann. "Thomas Jefferson told us, having a revolution every now and then is a good thing. And the people -- we the people -- are going to have to fight back hard if we're not going to lose our country."

On the one hand, it seems clear that Bachmann was speaking figuratively. On the other hand, is it appropriate for a member of Congress to speak in any context about being armed for revolution?

No, probably not. But this seems to fit in with a larger trend. We have one GOP lawmaker saying the party should emulate the insurgency tactics of the Taliban. We have another arguing the party should position itself as "freedom fighters" taking on the "slide toward socialism."

And now Bachmann is throwing fuel on the fire of right-wing rage.

Obviously, Bachmann and other unhinged conservatives have the right to say what they please. But at a minimum, I think it's fair to describe this kind of talk from elected leaders in positions of authority as irresponsible.

The Target of Congress

The public outrage over the AIG bonuses has undermined support for Treasury Secretary Timothy F. Geithner at a pivotal moment. In an interview broadcast last night on "60 Minutes," Obama expressed strong support for Geithner, who has been criticized in Congress and elsewhere for what some call his halting response to the financial crisis and for not doing more to block the AIG bonuses. AIG paid the bonuses to members in its troubled Financial Services division after receiving more than $170 billion in federal bailout aid.

Still, Geithner is central to the Obama administration's plans for dealing with the global economic crisis, key portions of which are to be rolled out this week.

Geithner did not approve the bonuses of AIG and he did not know about it until, five days before payday, his aids informed him. The contracts were closed in March 2008, while the Board knew that AIG was at the edge of break down. Without the bailout aid AIG should not have reached the payday. Paulson/Bernanke and Congress did not provide a measure to stop paying bonuses in the bailout bill, and while Geithner wasn't in the former Congress nor in the Bush43 administration he is now under fire of the people who are really responsible for the debacle. They want the innocent to burn down for their own sins. But is that all of the motives?
On Thursday, Geithner is scheduled to testify before the House Financial Services Committee about overhauling financial regulation. He is likely to call for giving the Federal Reserve new powers to regulate the financial system as a whole, including power to oversee any institution that is big enough or intertwined enough to pose risks to the financial system.

Conservatives want to block new regulations, Republican and also Democratic conservatives, but they can't block the immense popular Obama doing what almost 85% of the public feels to be right: making an end to the kleptomania in the financial system. If they can get rid of Geithner the Obama administration will be severely beaten in its policies to solve the problems and regenerate the economy at the costs of the conservative bandits and their longtime servants in Congress.

Let's have a look at the real evil genius:

Republican Senator William Philip Gramm
Republican Senator William Philip Gramm was one of five co-sponsors of the Commodity Futures Modernization Act of 2000. One provision of the bill is often referred to as the "Enron loophole" because some critics blame the provision for permitting the Enron scandal to occur. Gramm's wife, Wendy Lee Gramm, was on the board of directors of Enron when it collapsed, and she was named in many of the Enron shareholder lawsuits.

Between 1995 and 2000, Gramm was the chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. During that time he spearheaded efforts to pass banking deregulation laws, including the landmark Gramm-Leach-Bliley Act in 1999, which removed Depression-era laws separating banking, insurance and brokerage activities. As a senator, Gramm often called for reductions in taxes and fraud in government spending.

2007 mortgage and 2008 financial & economic crises
Some economists state that the 1999 legislation spearheaded by Gramm and signed into law by President Clinton "the Gramm-Leach-Bliley Act" was partly to blame for the 2007 subprime mortgage crisis and 2008 global economic crisis. The Act is most widely known for repealing portions of the Glass-Steagall Act, which had regulated the financial services industry. Gramm responded to criticism of the act by stating that he saw "no evidence whatsoever" that the sub-prime mortgage crisis was caused in any way "by allowing banks and securities companies and insurance companies to compete against each other." The Act, it should be noted, passed the House by an overwhelming majority and passed by unanimous consent in the Senate, though it was introduced on the last day before Christmas holiday and never debated by either congressional body.
The Washington Post in 2008 named Gramm one of seven "key players" responsible for winning a 1998-1999 fight against regulation of derivatives trading. Gramm's support was later critical in the passage of the Commodity Futures Modernization Act of 2000, which kept derivatives transactions, including those involving credit default swaps, free of government regulation.
2008 Nobel Laureate in Economics Paul Krugman, a supporter of Barack Obama, described Gramm during the 2008 presidential race as "the high priest of deregulation," and has listed him as the number two person responsible for the economic crisis of 2008 behind only Alan Greenspan. On October 14, 2008, CNN ranked Gramm number seven in its list of the 10 individuals most responsible for the current economic crisis. In January 2009 Guardian City editor Julia Finch identified him as one of twenty-five people who were at the heart of the financial meltdown. An Internet poll currently ranks Gramm #1 among 25 people selected by Time as candidates to blame for the economic crisis.

John McCain 2008 presidential campaign
Gramm was co-chair of John McCain's presidential campaign and his most senior economic adviser from the summer of 2007 until July 18, 2008. In a July 9, 2008 interview on McCain's economic plans, Gramm explained the nation was not in a recession, stating, "You've heard of mental depression; this is a mental recession." He added, "We have sort of become a nation of whiners, you just hear this constant whining, complaining about a loss of competitiveness, America in decline." Gramm's comments immediately became a campaign issue. McCain's opponent, Senator Barack Obama, stated, "America already has one Dr. Phil. We don't need another one when it comes to the economy. ... This economic downturn is not in your head." McCain strongly denounced Gramm's comments. On July 18, 2008 Gramm stepped down from his position with the McCain campaign. Explaining his remarks, Gramm stated that he had used the word "whiners" to describe the nation's politicians rather than the public, stating "the whiners are the leaders." In the same interview, Gramm said, "I'm not going to retract any of it. Every word I said was true."

EU pressure
Obama administration this week is expected to announce new proposals for financial regulation, executive pay, accounting standards, the structure of the International Monetary Fund and other issues ahead of a summit of 20 major nations in London on April 2.

At the summit, leaders will seek to reach a consensus on those and other coordinated steps meant to combat the global economic crisis and prevent a repeat. In particular, France and Germany are seeking to win assurances at the summit that Washington is committed to tighter financial regulations.

Diplomatic sources say the Europeans have largely backed the 24 recommendations contained in a report of an advisory group to the Group of 20 industrialized and developing nations calling for broad reforms, including tighter regulations of hedge funds and rating agencies as well as higher capital requirements for banks.

The details of how to enact such changes are likely to be left to each nation, though the Europeans are pressing for countries including the United States to agree to a rough outline of principles. For instance, they are requesting that the G-20 adopt language that would call for hedge funds to register and report regularly on their size, investment style, borrowing levels and performance. Currently, hedge funds are not subject to rigorous reporting requirements.

The report calls for G-20 nations to take new steps to monitor and prevent excessive levels of executive compensation, although administration officials said that was not a central thrust of the proposals. That would be done partly by having regulators take executive compensation packages into consideration when assessing the overall risk levels at major financial institutions.