Hitting bankers where it hurts

US FEDERAL regulators will in future be able to take back two years of pay from executives held responsible for a large bank's failure.

Executives deemed "negligent" and "substantially responsible" for a big bank's failure can now lose all compensation from the previous two years under a rule approved yesterday by the board of the Federal Deposit Insurance Corporation.

The rule is part of the financial overhaul that Congress passed last summer.

Another section creates an orderly way to shut down large, failing banks to prevent a crisis from spreading. Under the new rules, a teetering financial company can be taken over by the government, broken up and sold.