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Saturday, November 21, 
2:49 am

Credit Suisse gives a bonus no one wants

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stink.jpgIt appears that Credit Suisse Group may have finally figured out a way to curb the risk-taking behavior of its senior employees ... by giving them bonuses in the form of $5 billion of the toxic mortgage-backed assets that lie at the heart of the credit crisis. 

 

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Credit Suisse will pay the executives in leveraged loans and commercial mortgage-backed debt that will be placed into a partner asset facility. Employees at the bank will be given stakes in the facility as part of their pay, with the new bonus pool taking the first hit should the securities decline further in value, according to Bloomberg.
 
The deal actually works out well for both the Swiss bank and the employees, since the risk from the $5 billion in assets no one wants is moved off of Credit Suisse's books, while the senior managers who might not have received anything considering the state of the bank, get something ... which, I guess, is better than nothing (and certainly shouldn't prompt the public outrage of giving cash bonuses). After all, not all of the securities can go to zero, and sometimes it's good to eat your own cooking. - George White
 
See Bloomberg story








Comments

From: BizReporter,

Wall Street never ceases to amaze. This is a brilliant idea that only the wizards on the Street could dream up.


From: Another hack,

@BizReporter: Only, you know, Credit Suisse is Swiss. (The name's a dead giveaway).


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