tag:blogger.com,1999:blog-8152901575140311047.post3162599374958857347..comments2024-03-28T06:23:58.716-04:00Comments on Musings on Markets: II. Why did it happen?Aswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-8152901575140311047.post-69636383236021796002008-09-28T11:59:00.000-04:002008-09-28T11:59:00.000-04:00You are dead on about compensation. There is too ...You are dead on about compensation. There is too little downside risk for executives over long periods of time. Let them bear the risk over the period that their decisions have effect (i.e. decades)<BR/><BR/>Perhaps we could have avoided much of this if we forced banks to retain the equity tranche of securitizations. If they do, they have a vested interest in assuring that underwriting actually happened correctly.<BR/><BR/>Mortgage fraud is still going on. My landlord, for example, pretends this is his primary residence and is no doubt getting a few basis points lower rate. Underwriting fraud needs to be cracked down on big time.Unknownhttps://www.blogger.com/profile/06662201005690412179noreply@blogger.com