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End Bonuses for Bankers

theodp (442580) writes | more than 2 years ago

Math 2

theodp (442580) writes "NYU risk engineering prof Nassim Nicholas Taleb has a suggestion that won't sit too well with the banksters. In his NY Times op-ed, Taleb writes: 'I have a solution for the problem of bankers who take risks that threaten the general public: Eliminate bonuses.' The problem with the bonus system, Taleb explains, is that it provides an incentive to take risks: 'The asymmetric nature of the bonus (an incentive for success without a corresponding disincentive for failure) causes hidden risks to accumulate in the financial system and become a catalyst for disaster. This violates the fundamental rules of capitalism; Adam Smith himself was wary of the effect of limiting liability, a bedrock principle of the modern corporation.'"

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This should be common sense (1)

Reverand Dave (1959652) | more than 2 years ago | (#37999248)

Unfortunately the majority of our banking system does not function on common sense, otherwise we wouldn't have such a huge income gap.

It would be better... (1)

fireman sam (662213) | more than 2 years ago | (#38003870)

If we ended bailouts for banks. Then the problem of bonuses for bankers would solve itself. IE, no money for banks, no money for bankers. The banks have raped the people for all they can give, now they want to rape the government of the rest of what the country can give.

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