Proven method to stop Wall Street piggery

While some are calling for delay of pay to force investment firm executive to act more rationally and for the greater good, Barry Ritholtz say such methods rarely work because what’s losing a few million to someone already worth hundreds of millions?

A better alternative, he says, is partnerships because the partners are fully liable for the actions of all the other partners and creditors can reach through and take personal assets to recover losses.

Not surprisingly, none of the Wall Street partnerships got into trouble, and I argue the full personal liability for losses are why. Execs at publicly traded Wall Street firms only risk was their future earnings and stocks. The actual losses fell to the shareholders, bondholders and eventually, the taxpayers.

The question isn’t if this will work — we know it already does. The only issue is whether we have the political will to impose this liability on our reckless, irresponsible executive class …

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