In early February, James proposed that bankers’ bonuses be paid out in “toxic assets” – after all, the industry was arguing that these would definitely rebound (“it’s just a liquidity problem”) and that their “true” value was substantially above current market value. The idea was well received by our readers but not so much by the banking or insurance industry.
Someone quickly pointed out that – back in December – Bloomberg reported Credit Suisse would actually use a version of the same idea. And, in the whirlwind of the fall, I now vaguely remember this same point coming up even earlier in some bigger discussion.
So in the spirit of proper attribution (also because a reader asked and I’d like to know the answer), here is our first ever weekend “comment competition”.
Who really originated this (very good) idea, either in private discourse or – easier to document – in a public comment, blog post, corporate document, or the like? We’d also welcome updates on where any form of this idea is being used in practice.
By Simon Johnson