CFTC Commissioner Chilton's Speech: "Symbols, Cymbals and Systems - A Culture Shift Conversation"

Commissioner Bart Chilton made a speech regarding the need for a culture shift conversation (i.e., a shift in focus in our financial sectors) with the government, the private sector and other interested parties with the aim of improving the financial system. Specifically, Chilton asserts that inducements and bonus systems create a poisonous pattern in the financial corporate culture and fail to generate the long-term gains (such as sustainable economic growth or real value to the business, consumers and the country). Chilton argues that compensation systems should be fashioned upon a risk-tolerance-basis rather than a purely profit-based structure where the system rewards and promotes the risk-taking folks more than others. Bonuses and added compensation should take place over a longer period of time. According to Chilton, this would promote longer-view strategies and actions and retain better and longer-serving employees. The speech also discusses recruitment and hiring.

According to Chairman Chilton, "[government] can incentivize good behavior through our laws, rules and regulations. The Dodd-Frank Act goes a long way in this regard. Specifically, we can help establish an environment in which these firms operate with appropriate transparency, integrity, and standards of conduct."

View speech in full here (links externally to CFTC website).