updated 11/1/2009 3:23:16 PM ET 2009-11-01T20:23:16

Executives of America's 28 largest banks will meet with Federal Reserve supervisors on Monday to discuss the Fed's plan to police banks' pay policies, officials said Friday.

Under a plan recently put forward by the Fed, the central bank would review — and could veto — pay policies that could cause too much risk-taking by bank executives, traders or loan officers. It would not actually set the compensation.

"Federal Reserve officials will be meeting with bank executives Monday to discuss the process for the reviews of incentive compensation arrangements" at the largest banks, a Fed spokesman said.

The meetings will take place at Fed regional banks around the country, not at the Fed's headquarters in Washington, Fed officials said.

Citigroup Inc., Bank of America Corp. and Well Fargo & Co. are among the top 28 banks.

Executives and supervisors will talk about how banks' executive compensation information will be shared with the Fed, and how the Fed will go about "horizontal" reviews of compensation plans. Information from those review will help give the Fed a big picture about compensation trends and practices across companies. No policy decisions will be made at the meetings.

The Fed's goal is to make sure banks' pay policies don't encourage top managers or other employees to take gambles that could endanger the company, the broader financial system or the economy.

Under the Fed proposal, the 28 biggest banks would develop their own plans to make sure compensation doesn't spur undue risk taking. If the Fed approves, the plan would be adopted and bank supervisors would monitor compliance.

At smaller banks — where compensation is typically less — Fed supervisors will conduct reviews. Those banks don't have to submit plans.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com