SocraticGadfly: Securitize Wall Street salaries?

October 08, 2010

Securitize Wall Street salaries?

William D. Cohan has an idea to restrain greed in the financial sector — securitize top executive salaries:
I propose that each large Wall Street firm create a new security that represents — and is secured by — the entire net worth of its 100 top executives. This security would be subordinated to all other creditors as well as to all preferred and common shareholders; in other words, if a firm goes bankrupt, this security is the first to be wiped out.

Boy, wouldn't that shrivel some gonads at big banking houses?

I'm all for it!

Let's make this one better, though.

Let's let average Joes and Janes slice and dice these securitized salaries, then sell them all over the place. Wouldn't you like to sell part of a securitized salary of Goldman Sachs CEO Lloyd Blankfein to a Chinese sovereign wealth fund?

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