Speaking of Banking Compensation

There's been no pickup that I've seen of striking news in an excellent mid-November page one profile in the Washington Post on Hank Paulson's ideological evolution. To wit:

....in the coming weeks, he is planning to announce a valedictory set of proposals to modernize Washington's aging regulations and extend their reach into matters that traditionally have fallen beyond the purview of federal officials....Paulson said he will urge Congress and the administration to grant the Fed broad discretion to examine the books of any firm, regulated or unregulated. This would require large hedge funds, private-equity firms and other now-unregulated financial entities to accept a charter from the Fed and open their financial records to its officials...

He added that executive compensation for financial firms also needs substantial reform, which could be accomplished partly through banking regulation...Paulson said he pushed the five major federal banking agencies over the past weeks to release a guidance document that would require firms to eliminate compensation that encourages risky behavior by traders and executives.

Paulson came to DC a free-market Republican; he'll leave (hopefully) with public calls for compensation reform in his old haunts. Despite the critics he'll face at the club, let's hope he really steps out on this.