Bank regulators given big bonuses
Wall Street financial firms weren’t the only ones giving big bonuses in the boom years before the worst financial crisis in generations. The government also was handing out millions of dollars to bank regulators, rewarding « superior » work even as an avalanche of risky mortgages helped create the meltdown.
Just as bank executives got bonuses despite taking on dangerous amounts of risk, regulators got taxpayer-funded bonuses despite missing or ignoring signs that the system was on the verge of a meltdown.
During the 2003-06 boom, the three agencies that supervise most U.S. banks – the Federal Deposit Insurance Corp. (FDIC), the Office of Thrift Supervision (OTS) and the Office of the Comptroller of the Currency (OCC) – gave out at least $19 million in bonuses, records show.
Nearly all that money was spent recognizing « superior » performance. The largest share, more than $8.4 million, went to financial examiners, those employees and managers who scrutinize internal bank documents and sound the first alarms. Analysts, auditors, economists and criminal investigators also got awards.
Because most bank inspection records are not public and the government blacked out many of the employee names before releasing the bonus data, it’s impossible to determine how many auditors got bonuses despite working on major banks that failed.