WASHINGTON (AP) — Federal banking regulators are seeking public input on a plan to link the insurance premiums levied on U.S. banks to the degree of risk-taking encouraged by their executive pay policies.
The board of the Federal Deposit Insurance Corp. is voting Tuesday to make public a preliminary proposal for using executive compensation as a factor in assessing the fees that banks must pay for the deposit insurance fund.
The plan could involve both rewards and penalties for banks.
FDIC Chairman Sheila Bair says “this is something we cannot ignore.”
The FDIC is seeking public comment on the plan for 30 days. If there is a final rule, it isn’t expected to be adopted until late in the year.