Reuters reports that a new rule under Dodd-Frank gives the FDIC the power to “snatch back” up to two years of executives pay if they are found to be responsible for the collapse of a major financial firm. “The provision is part of a broader Federal Deposit Insurance Corp rule laying out the order in which creditors will be paid during a government liquidation of a large, failing financial firm.” Banking officials have expressed concerns that the new regulations are pushing it, though legislators maintain that the changes are reasonable under the intent to help stave off a repeat of the 2008 financial crisis.
Financials (NYSE:XLF) down 1.1% are getting smoked out today on news of Moody’s (NYSE:MCO) downgrades on Portuguese sovereign debt and another interest rate hike in China (NYSE:FXI). A look at some of the top financials here:
JP Morgan (NYSE:JPM) down 1.34%, Goldman-Sachs (NYSE:GS) down .72%, Citigroup (NYSE:C) off 1.62%, Wells Fargo (NYSE:WFC) slipping 1.58%, Bank of America (NYSE:BAC) down 2.45%, and euro banks really bringing up the rear this morning with Barclays (NYSE:BCS) down 3.88%, Lloyd’s (NYSE:LYG) down 1.63%, and Royal Bank of Scotland (NYSE:RBS), falling 3.18%.