This is the best idea I’ve heard of in some time. Credit Suisse Group AG is going to pay its executives bonuses out of a pool of toxic mortgage-backed assets that it cannot currently sell. I love this because it is both just and clever. The executives at the bank now have every incentive to figure out a way to make these rotten assets turn into something less rotten, and if they don’t, they’re in the same boat as the investors who purchased them.
December 19, 2008 at 1:23 pm
“Cannot” meaning nobody wants them, or “Cannot” meaning legally prevented from doing so. If it’s the first one, what’s to prevent the usual executive “pump-and-dump” strategy?
December 19, 2008 at 1:25 pm
Cannot meaning there is no market for them currently. The article says they make take outside investments in the same pool of securities that are going to fund the bonuses.