Fines At Banks Should Be Paid From Deferred Compensation: NY Fed's Dudley

Fines should mostly be paid out of a firm's deferred debt compensation, New York Fed President William Dudley suggested Monday at an event the regional central bank is hosting on improving culture in the financial services industry. Dudley likened these "performance bonds" to security deposits at rentals, and said that if the total level of performance bonds were then depleted, then more compensation could be shifted to this form. Dudley also said that more pay should be deferred for as long as ten year's time. He also suggested the creation of a central registry that tracks the hiring and firing of traders and other financial professionals across the industry, similar to what already exists for broker/dealers. Earlier, Fed Gov. Daniel Tarullo also suggested more can be done to link pay to regulatory performance.