"There should be a moratorium on bonuses,'' Frank, a Massachusetts Democrat, told reporters yesterday in Washington. "They have a negative incentive effect because they are the ones that say if you take a risk and it pays off you get a big bonus,'' and if it causes losses "you don't lose anything.'' The halt on bonus payments should last "until they can get a better structure without that perverse incentive,'' he added. - Bloomberg.com
"The people who took out imprudent loans, the banks who made imprudent loans, the Government Sponsored Entities who guaranteed the imprudent loans, the conservative politicians who pushed for deregulation and figured the free markets would work on their own, the liberal politicians who pushed for the unreasonable goal of home ownership for everyone and exacerbated the debt problem (and who continue to suggest more debt as the solution), the ratings agencies who completely failed in their risk assessments, the people who bought the derivatives instruments and used extreme leverage to create a systematic risk to our country, and finally, the SEC - who first increased the maximum leverage allowed (At the behest of current Secretary of the Treasury Paulson, who was then at Goldman Sachs) and then failed miserably in its oversight roll and was probably most charged with preventing such abuses."