Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis — and Themselves

by Andrew Ross Sorkin

But the most significant change to the financial system was a function of the Federal Reserve’s establishing minimal capital requirements for banks, which made it harder for them to increase leverage levels and therefore risk. These new provisions didn’t require legislation and often did not make headlines, but the reduction in leverage had a serious cascading impact on banks. They also had an impact on incentives: the inability to take on as much risk led to a recalibration of compensation, because banks simply couldn’t earn as much. While some senior executives could still make a great deal of money—Jamie Dimon was paid $28 million in 2017—entrepreneurial financiers looking for riches left and turned to jobs at hedge funds or in private equity, or struck out for Silicon Valley.