FDIC to determine insurance rate fees based on manager's salaries, not just the direct risk of the bank's investments

It isn't it bad enough that the FDIC is responsible for the S&L crisis and it was responsible because it didn't charge premiums that reflected the riskiness of the bank's assets. Apparently, they didn't learn their lesson.

The Federal Deposit Insurance Corp.'s board could vote next week to propose tying the fees lenders pay the agency for deposit insurance to the risk profile of compensation packages for executives, people familiar with the matter said.

The plan, if adopted by the regulator, could serve as both a carrot and a stick for lenders. Banks with compensation structures the FDIC views as less risky, such as those that allow firms to claw back pay from executives, could be given a break on the fees they pay on deposit insurance. Firms that have pay structures the FDIC views as giving officials an incentive to put the company at more risk could be forced to pay more.

The proposal is in an early stage, but it represents the latest government effort to curb financial companies' pay structures. Federal officials have criticized banks for offering too many incentives to loan officers and traders with little regard for whether loans or trades eventually went sour. Federal Reserve officials are working on a separate plan to curb the incentives and bonuses banks pay certain employees.

The FDIC has already used its deposit insurance assessment structure to target risky bank behavior. The agency requires banks to pay more in deposit insurance fees if they are on shakier footing, accept large amounts of high-risk deposits, or rely too heavily on funding from Federal Home Loan Banks. . . .