President Obama said during an interview this week that executive pay incentives are next on the financial reform agenda as part of an effort to make the U.S. financial system safer.
“The single biggest thing that I would like to see is changing incentives on Wall Street and how people get compensated,” Obama said, adding that reforms under the 2010 Dodd-Frank Act may not have completely altered pay incentives, Manorama Online reports.
The interview, which will appear Friday in Rolling Stone, covers the president’s first term in office, what he sees as his greatest accomplishments and the race against Mitt Romney for the White House.
Both the president and Romney have ramped up their campaigning as the Nov. 6 election draws closer. Obama highlights financial reform as a major accomplishment of his first term, saying the reforms will prevent a repeat of the 2008 financial crisis, Manorama Online reports.
Dodd-Frank reforms, however, have remained largely unpopular with the banking and financial industries, both of which maintain that the law will hinder the recovering economy. Romney has promised to repeal certain provisions of the law if elected as president.
Obama said that market stability is still an issue, as risky bets that are successful are generously rewarded while bets that result in losses face few consequences.
“It tilts the whole system in favor of very risky behavior,” Obama said, according to Manorama Online. “By the time the chickens come home to roost, they’re still way ahead of the game.”
Obama said that legislation of the executive compensation system may not inspire complete change, adding that desired changes may require action by shareholders and directors.
Additionally, the president said that enforcement of the Volcker Rule, a ban on proprietary trading, will remain a challenge in ensuring increased financial stability in the future, Manorama Online reports.
Progress on the rule has been sluggish, as regulators received thousands of comment letters on the measure. Two U.S. senators urged regulators on Thursday to finish writing the rules before year’s end.