• From The BBC:

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    Stephen Green, Chairman of HSBC talks to Robert Peston
    Bankers’ pay needs to be reformed so they are no longer handsomely rewarded for deals that turn bad, the chairman of HSBC has warned.
    Chairman Stephen Green told the BBC that the banking industry was too focused on short-term profits.
    He said that current pay schemes did not reflect long-term performance.
    He indicated remuneration was one of the causes of the credit crunch as some staff were paid too much for deals that ended up costing their banks a fortune.
    Banks worldwide have lost around 0bn (£170bn) from investments related to the sub-prime mortgage crisis.
    Initially these bets on the sub-prime market, which lends to those with poor or patchy credit histories, were very profitable for banks as house prices rose and borrowers repaid their loans.
    However, the market for mortgage-based securities turned sour last summer as defaults rose and the value of thes…

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    Posted by Jon @ 10:40 pm

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