Obama Seeks Legal Authority To Stop Future Bonuses

Obama Seeks Legal Authority To Stop Future Bonuses

President Barack Obama said he will seek legal authority over the financial system that will give the federal government power to step into contract issues, such as the one that has allowed American International Group Inc. to pay out $165 million in retention bonuses to employees of the tottering insurance giant's financial products group.

The president said he spoke with House Financial Services Committee Chairman Barney Frank this morning about granting him "resolution authority" similar to the power the Federal Deposit Insurance Corp. has over the thrifts it regulates. That would allow his administration to potentially abrogate contracts that it can show does not serve the good of newly regulated entities like AIG.

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