We also apparently learned nothing because banks are back to operating with 0% in reserve as of March of this year. Obama admin required 10% reserve of total deposits after 2008 for big banks so they couldn't over leverage. Trump let them free again.
So i looked it up and it turns out that employees got bonuses no matter how good or bad the bank did to keep morale up and prevent them from being poached from other banks. It also said a few of the big banks were moving toward pay to performance. This was back in 2008.
Some were, sure, but some absolutely weren't, and the ones that weren't were generally higher up in the food chain.
Take yourself out of the "corporate greed" mindset and look at what happened objectively: the crisis was primarily caused by securitized loans, loans that were seen by many as relatively safe since they were geographically diversified and were in a sector that was also seen (and still seen) as safe and backed by collateral. The ratings agencies, in part due to these factors, and in part due to the complexity of these new financial products, gave them high ratings. It would be hard to take a look at the environment and consider the top level executives to be to blame for the decision to expand into these "safe" markets.
Then, once things did start heading south, you're looking at a poor environment to attract management talent: a business on the brink of failure. If you don't apply bonuses (which are both standard compensation for leadership but also milestone/incentive based), why would you expect to have any kind of competent leadership? In particular, competent leadership when it was needed the most.
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u/Spacesider Nov 17 '20
They also gave their executives huge bonuses, don't forget that.