Corrigan Warns Against Stalling Bank Reform
WASHINGTON - Using the Salomon Brothers Inc. bond bidding scandal to delay action on a banking bill "would be a mistake," E. Gerald Corrigan, president of the Federal Reserve Bank of New York, told Congress.
In testimony prepared for delivery Wednesday to the Senate Securities Subcommittee, Mr. Corrigan said, "Some might look at the Salomon episode as a reason to further delay much needed progressive banking legislation.
"That, in my view, would be a mistake, which I hope we can avoid," he said.
Mr. Corrigan also attacked compensation practices in the financial sector as excessive, singling out pay for securities traders and foreign exchange traders.
Just an Old-Fashioned Guy
"Maybe I'm too old-fashioned, but I cannot see the merit of compensation practices that yield millions of dollars per year, for example, for individual securities or foreign exchange traders," Mr. Corrigan said in testimony centering on the Salomon Brothers bidding scandal.
Salomon Brothers, as reported, has disclosed that Paul Mozer, recently deposed as head of its government bond trading desk, got bonuses in 1988, 1989, and 1990, respectively, of $2,850,000, $3,850,000, and $4,600,000.