Citigroup Architect John Reed Blames Crisis On Incentives


News: The architect of the merger between Citicorp and Travelers Group - creating Citigroup in 1998 - has argued that the financial crisis was driven by pay incentives for traders rather than the universal banking model, the Financial Times reports. John Reed said that incentives and massive bonuses for traders was the key problem, with trading attracting a different kind of employee than commercial banking. Reed added that the culture of an entire organisation could be impaired if trading significantly outgrew commercial banking in proportion.

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