Hello, After reading several threads about trading desks recent profitability and expected record bonuses, I just realized that finance really have short memory and the way compensation works in institutions is beginning to bother me... I am not envious but is this normal that institutional traders get a "free call" on their wealth, sharing positive performances while never ever being financially responsible for their losses. There are few domains in economy that allow this kind of behaviour and it is one of the most scandalous manifestation of privatize gains/socialize losses behaviour. I know, it 's getting old now... So, what would be your opinion on the instauration of maluses( mali? ) for traders? Not even in the same percentage of performance as bonuses, but just a little 5 % or so to make them more responsible( bonuses are something like 12% ). We can even imagine a system where the trader either choose base salary only or accept base + bonus/malus when getting hired... I am talking about performance bonuses here, not bonuses that are due to a particular contribution/ work... Is it that stupid? In fact, I 'm a bit confused nobody I know of in politics/newspaper came up with this kind of idea after the recent turmoil. Thanks a lot.
Oh well, perhaps this has a bit to do with one of my "friend", institutional trader, calling me yesterday after calculating his bonus for the first half year of 2009....LOL... And I know he lost BIG last year.