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US board approves rule allowing feds to recapture 2 yrs of pay from execs at failed banks
WASHINGTON (AP) ' Federal regulators will be able to take back two years of pay from executives deemed responsible for a large bank's failure.
The board of the Federal Deposit Insurance Corp. on Wednesday approved a rule allowing the government to recapture the money from any executive deemed "negligent" and "substantially responsible" for a bank's failure.
Banks objected to an earlier version of the rule that they said might induce key executives to jump at the first sign of trouble.
The rule is part of the financial overhaul passed last summer. Regulators gained broad powers to recapture pay from executives of large, failed financial companies.
The FDIC is in charge of a section of the overhaul that creates an orderly way for shutting down large, failing banks to prevent a crisis from spreading.