Christine Romer, Chair-White House Council of Economic Advisers said on Sunday morning that she hoped that the banks would show restraint in paying huge bonuses.
Romer was responding to a question posed on the ABC’s “This Week” that banks are poised to pay big bonuses and whether Obama’s warning not to do so would be heard.
In elaborating, Romer noted that the government, had quite appropriately provided extraordinary aid to banks in view of the near collapse of the financial system. However, it would be “outrageous”, she said, as the financial system improves, if banks were now to go back to doing business as usual.
If this were to be the case, Romer maintained that the government would have to redouble its efforts to put in place enhanced financial regulatory reform. Further, she opined, new rules of the road would be needed so that “the system doesn’t bring the economy to the edge of collapse like it did a year or so ago”.
