PayThink

The following letter was submitted to 100 Voices by the $16.6-billion State Employees Credit Union in North Carolina. It was handwritten by a member and submitted by CEO Jim Blaine, who said, "I gave some thought to how best to define 'the voice of SECU' for your series. Decided to share with you a note from one of our members — affectionately known as 'The Cat Food Letter.' If you want to know what our organization is about, she nailed us!"

Treasury Secretary Timothy Geithner is laying out his regulatory restructuring plan today for the House Financial Services Committee. His proposal focuses on getting too-big-to-fail institutions under control. It would give the Federal Deposit Insurance Corp. the authority to seize and dismantle failing financial firms deemed systemically important by the Federal Reserve Board. BankThink brings you Geithner´s testimony and the committee members´ questions live.

When, this morning, during the House Financial Services Committee hearing on AIG oversight, Rep. Maxine Waters, D-Calif., referred to the "small group of Wall Street types that are making decisions," she wasn´t talking about just any finance experts. She was wiggling a finger under the lid of the biggest conspiracy this side of 9/11-or so she made it seem.

The House Financial Services Committee is interrogating Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and New York Fed President William Dudley on the government's handling of the AIG bailout. We here at BankThink were expecting more pressure on Geithner than has materalized so far, and we were also hoping for some hints on the Treasury's new regulatory restructuring plan. Geithner's opening statement contained a brief mention of the need for an authority to seize and dismantle non-bank financial institutions that pose systemic risks. But there were few details, and Geithner didn't say which government agency should be granted the authority.

Another day is dawning on Treasury Secretary Timothy Geithner´s baptism by fire and it will be an important one. Yesterday, investors and markets cheered when he unveiled details of his plan to clean toxic assets of banks´ balance sheets. Today, the House Financial Services Committee, with its bonus-hungry Democrats and its bloodthirsty Republicans, will interrogate Geithner, Federal Reserve Chairman Ben Bernanke and New York Fed President William Dudley on the orchestration of the AIG bailout. The hearing is just beginning, and Financial Services Committee Chairman Barney Frank, D-Mass., has announced what we all expected: That the questioning will be "open to other matters."

There isn´t too much time left before Congress´ Easter recess and the consensus is now that the bankruptcy reform legislation the House passed won´t make it through the Senate before everyone leaves town. But that doesn´t mean this week in Washington will be a quiet one. Furor over the bonuses paid to American International Group executives has upended many formerly solid power dynamics on the Hill. Senate Banking Committee Chairman Chris Dodd may be in trouble and, judging from his swift plunge, the next victim of unchecked populist grandstanding is anyone´s guess. Somewhere in the fray is a bill that would claw back most bonus payouts not just from AIG employees but from some Troubled Asset Relief Program fund recipients as well. Dark times indeed for those bankers and perhaps the source of a comment during Thursday´s Senate Small Business Committee hearing that there ought to be separate bailout programs for "good people" and "bad people."

This week hasn´t been pretty for Sen. Chris Dodd. Our business isn´t to take sides, but it´s worth noting: It wasn´t too long ago that bankers and politicians were mostly relieved that his executive compensation provision did not apply retroactively.

Editor's note: the following letter to the editor was written in response to the story titled "CU Aversion To Government Bailout Dissipates" related to the corporate stabilization plan (CU Journal, March 13).

In talking with CEOs and board members it has been surprising to find that a significant number are not comfortable that the CEO incentive plan they have is either effective or appropriate. This is worrisome because it can contribute to poor performance and dissatisfaction by both board members and CEOs. Let me point out several features that an incentive plan should have that will effectively motivate the CEO.

The question of research in-house vs. outsourced implies an either-or answer. In truth, and with the "Five Ps" as a guide, this is more than an all-or-nothing question. The Five P's are a process for effective research results — Purpose (why), Plan (how), Performance (implementation), Processing (analysis), and Presentation (reporting) — and can be helpful in determining in-house vs. outsourcing of research, in part or whole.