Thursday, December 18, 2008

Sauce for the goose

Now this actually seems clever (Wall Street Journal, subs. req'd) --

ZURICH -- Credit Suisse Group said Thursday it will use its own illiquid assets such as mortgage-backed securities to pay senior staff at its investment bank year-end bonuses.

The Zurich-based bank plans to pool its illiquid assets such as commercial mortgage-backed securities and leveraged loans it can't sell because demand has seized up, then dole out portions of the entity to managing directors and directors, according to a memorandum made available by a spokesman.

"Employees receiving partner asset facility units will participate in the potential gains from these assets over time if they are liquidated at prices above current market values and also bear risk of loss depending on the liquidation proceeds," the memo said.

There are potentially good incentive properties if senior bank staff are getting paid, literally, using the same shite that they hoped to foist onto someone else. Are the Swiss on to something?

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