The requirement that, in the event of a loss at a bank, either – all employees in the active business area, i.e. not including those employed in merely administrative activities, such as janitor services, telephone exchange or plant security (protective service), or – executives above a certain rank in the hierarchy must contribute to covering the loss by waiving part of their salary. This is expected to provide a strong incentive to handle risks more carefully. – So far, this requirement is still very far off. For example, the Union Bank of Switzerland (UBS: Switzerland’s largest global bank) incurred losses of around CHF 60 billion in the course of the subprime crisis. Nevertheless, its executives were paid record amounts in bonuses. The situation was similar at Hypo Real Estate in Germany in 2010. However, it was explained there, as here, that without the bonus payments, key employees would leave the institution, and thus the bank would get into even bigger trouble. – See bank bailout law, bonus, handshake, golden, employee options, bonus, bailout, sleeping money, too big to saveprinciple, compensation, assets, intangible, asset levy, lemon trade.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/

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