Bank regulators earn more money than the bankers they oversee, says Paul Kupiec, a resident scholar at the American Enterprise Institute who formerly worked at the FDIC, International Monetary Fund and Federal Reserve.
"It is true that the very top bank executives make more in a year than most of us make in a lifetime, but compensation of this magnitude is rare," he writes in
The Wall Street Journal. "Most banks in this country are small businesses and pay employees modest salaries."
The average annual salary of a bank employee totaled $49,540 in 2012, compared with the $45,790 average for all occupations, according to The Bureau of Labor Statistics.
"Yet one group in banking stands out as highly paid — federal bank regulators," Kupiec argues.
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In 2013, workers at federal bank regulatory agencies received 2.7 times the average compensation of a private banker, rising from 2.3 times before the 2010 Dodd-Frank Act.
The average compensation for workers at the Office of the Comptroller of the Currency (OCC), the FDIC and the Consumer Financial Protection Bureau (CFPB) was more than $190,000 in 2012, he notes. The Fed won't release salary data for its employees.
In 2012, 66 percent of OCC staff and 68 percent of FDIC and CFPB staff were paid more than $100,000, while almost 19 percent of CFPB and OCC staff earned more than $180,000.
"These bloated salaries trace back to the savings-and-loan crisis of the 1980s, which was attributed in part to regulators' inability to attract and retain experienced bank supervisors," Kupiec explains. "The Financial Institutions Reform, Recovery and Enforcement Act of 1989 permitted federal bank regulatory agencies to establish their own compensation and benefits without the approval of the Office of Personnel Management."
As for top bankers, they're still doing quite well.
Goldman Sachs CEO Lloyd Blankfein earned $23 million last year, JPMorgan Chase CEO Jamie Dimon earned $20 million, Wells Fargo CEO John Stumpf earned $19.3 million and Citigroup CEO Michael Corbat earned $14.5 million, according to
Firmex, a data services company.
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