Bank of England under Fire over £23m Bonus Payouts

THE OBSERVER: Anger as thousands of Bank staff enjoy ‘performance awards’ after governor urged other British workers not to demand big rises

The Bank of England, which has been criticised for underestimating the threat of rising inflation, last year paid out bonuses to its staff amounting to more than £23m, the Observer can reveal.

This bonus pot was at its highest level for at least two years, with more than 4,260 employees receiving performance awards. Andrew Bailey, the bank’s governor, was widely criticised earlier this year after telling Britain’s workers that they should not be asking for big pay rises because inflation had to be kept under control.

The bank is tasked by the government with hitting an inflation target of 2%, but the current rate stands at 9.4%. Lord Sikka, emeritus professor of accounting at Sheffield University, said: “Bonuses should only be paid for extraordinary performance, but there is no evidence the bank has delivered even an ordinary performance. They are unjustified.” » Jon Ungoed-Thomas | Sarurday, August 13, 2022

PM Is Protecting Banker Bonuses, Claim Lib Dems
THE INDEPENDENT: The Liberal Democrats are making a final attempt to persuade David Cameron to rein in bankers' bonuses amid growing public anger over the imminent payout estimated at £7bn.

Liberal Democrat MPs believe that Mr Cameron, rather than the Chancellor, George Osborne, has emerged as the main obstacle to tough action against the bankers. They are furious that Downing Street signalled a climbdown this week while talks continued with the big banks on a new settlement covering bonuses and lending to small businesses and first-time buyers.

"You don't wave the white flag in the middle of tough negotiations," Baron Oakeshott of Seagrove Bay, a Liberal Democrat Treasury spokesman, told The Independent yesterday. "This is the moment of truth on fairness for our Coalition. We can't allow a bonus bonanza in the age of austerity." >>> Andrew Grice, Political Editor | Friday, January 14, 2011

Europe Set to Link Banking Bonuses to Basic Salaries
THE DAILY TELEGRAPH: European regulators are set to tether banker bonuses to the level of basic salaries in a move that could deal the most severe blow yet to the culture of multi-million pound pay-outs.

Under the terms of proposals, expected to be published on Friday, investment banks may be forced to limit bonuses to a set multiple of bankers' salaries that would be agreed with financial watchdogs.

The Committee of European Bank Supervisors (CEBS) wants to see an end to bonuses that can be up to 50 times bigger than a banker's salary. Instead, the group, which is based in London and comprises members of the 27 European Union member states, wants banks to have to agree a maximum ratio of fixed-income to deferred pay with their national regulators.

Jon Terry, head of reward at PriceWaterhouseCoopers, said: "While CEBS is unlikely to set a specific ratio, we expect them to propose a framework from which banks will work with national regulators on agreed bonus multiples, and then to have to justify them in the context of their risk profiles. This is going to be a radical change for many institutions." >>> Louise Armitstead | Friday, December 10, 2010

This is good news. But does it go far enough to curtail the greed of these money-grubbers? If something isn't done about this selfish culture that we now live in, I fear that the riots on the streets of London last night will look like a picnic in the park by comparison with what awaits us. The system we have now works for the good of one group of people only: the rich. The middle classes have been trampled on for far too long. – © Mark

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Lagarde: Bankers Better Be Careful

HSBC Doubles Salaries Of Investment Bankers
SKY NEWS: Banking giant HSBC is doubling the basic pay of hundreds of its senior investment bankers, Sky News can reveal.

Sky's City editor Mark Kleinman reports that the bank began informing staff in London, Hong Kong and New York about the pay rises last week.

A source close to the bank said some senior managers outside the global banking and markets (GBM) division were also being handed the pay increases.

HSBC's move comes ahead of the annual bank bonus round in the New Year.

"As UK politicians intensify warnings about the payment of mega-bonuses, HSBC may legitimately be able to point to a sharply reduced bonus pot by virtue of the fact that it will have only recently awarded large salary increases," noted Kleinman. Read on and comment >>> Hazel Baker, Sky News Online | Tuesday, November 16, 2010

Outrage as New Lloyds Bank Chief Executive in Line for £8.3m Benefits Package
MAIL ONLINE: Antonio Horta-Osorio has been named the new chief executive of taxpayer-backed Lloyds bank.

Mr Horta Osorio, the current UK boss of Santander, will join early next year when he takes over from current chief Eric Daniels, who is due to retire.

However the arrival package he will receive on his appointment has provoked outrage as he could scoop up to a whopping £8.3million in the first year alone.

His package includes a basic salary of just over £1million, but he could collect another £2.3million in annual bonuses plus around £4.3million in long term share awards.

In addition he will pay £610,000 in pension payments, meaning his total package could added up to £8.3million. >>> Daily Mail Reporter | Wednesday, November 03, 2010

Liberal Democrats Call for Draconian Tax on Bank Bonuses
THE GUARDIAN: • Lord Oakeshott calls for immediate tax
• £7bn expected to be paid out in bonuses this year
• RBS chairman says regulation the only route to reform

A new, more draconian tax on bonuses should be slapped on banks, a leading Liberal Democrat said tonight after the Royal Bank of Scotland chairman admitted that regulation was the only way to restrain the annual bonanza for bankers.

Amid estimates that the City would pay out £7bn in bonuses this year, Lord Oakeshott said the moment had now come to reintroduce a tax on bonuses which, when imposed on the banks last year, brought in £3.5bn for the exchequer.

Oakeshott, a Lib Dem Treasury spokesman, said that the situation was so grave that the government would need to act ahead of the report next year by its independent commission on banking – chaired by Sir John Vickers.

Speaking after David Cameron acknowledged the public's "anger" over bonuses, Oakeshott said: "As the prime minister has made clear, the banks are still paying ever bigger bonuses and not lending to small businesses.

"The answer must be to take immediate action on bonuses and the obvious way is to have a much tougher bonus tax than Labour's feeble feather-duster and much stricter net lending targets to small and medium-sized businesses while we wait for the banking commission to recommend more radical reform." >>> Jill Treanor | Tuesday, October 05, 2010

Credit Suisse Defends Its Bankers' Mid-year Bonus
THE TELEGRAPH: Credit Suisse has defended a decision to award its London-based bankers with a surprise mid-year bonus by claiming that it had no choice after its compliance with British rules on pay backfired.

Credit Suisse defends its bankers' mid-year bonus. Photo: The Telegraph
The Swiss bank suggested its decision to distribute a multi-million pound bonus-round, a move that looks set to re-ignite the row over City pay, was necessary to avoid losing key people to its rivals over the next few months.

Around 400 bankers are thought to have benefited from the windfall payments which will be awarded on Wednesday, in addition to the payments traditionally made at the end of the year.

The bank consulted with the Financial Services Authority (FSA) over the September bonuses, although it is not clear if the Government was warned in advance.

Credit Suisse was at pains to point out that the payments are compliant with the FSA's latest rules and include tough conditions including deferred payment and claw-back provisions.

Even so, the extra payouts, particularly at a time of concerns over a double-dip recession, are likely to reignite the row over City pay.

Politicians and regulators, who have vowed to crack-down on lavish payments by banks in the wake of the financial crisis, will be concerned that the unusual move is a prelude to another controversial bonus season. Read on and comment >>> Louise Armitstead, Chief Business Correspondent | Tuesday, August 31, 2010

David Cameron Declares War On Public Sector Pay
THE TELEGRAPH: David Cameron has vowed to crack down on "crazy" bonuses paid to civil servants as the new Government seeks to reduce the costs of the bloated public sector.

Out of control hand-outs, which this year will be paid to three-quarters of senior civil servants, are to be restricted to high performers.

Under the terms of Whitehall contracts signed by Labour ministers at the height of the recession, bonus payments can not be cancelled by the incoming Government.

In future, however, windfalls across the public sector will be restricted to employees who have performed “exceptionally well,” with only the top 25 per cent eligible for the payments. >>> Rosa Prince, Political Correspondent | Sunday, May 16, 2010

Ministry of Defence Civil Servants Paid £47 Million in Bonuses
THE TELEGRAPH: Civil servants at the Ministry of Defence have been paid £47 million in performance bonuses so far this year.

A total of 232 British service personnel have been killed in Afghanistan since 2001. Photo: The Telegraph
The MoD said the bonuses were paid for “exceptional performance” but the disclosure came as the Government faced increasing pressure over the lack of equipment for troops serving in Afghanistan.

There are 85,000 civil servants at the MoD — one for every two active soldiers, the highest level among the Allied nations — and about 50,000 will get a performance bonus this year.

Troops serving in Afghanistan would be “aghast” at the payments, the Conservatives said last night.

The bonus figure covers just the first seven months of the financial year. The MoD said yesterday that the bonuses would average less than £1,000, but a senior civil servant could pick up £8,000. Last year, the department had 95 employees who were on a salary of more than £100,000. A private in the Army can be paid as little as £16,681 a year, with a bonus of £13 a day for serving in Afghanistan.

British troops are dying in Afghanistan at a rate not seen since the Falklands conflict and polls indicate that voters are turning against the mission.

A total of 232 British service personnel have been killed in Afghanistan since 2001. Commanders have said that some of those deaths could have been avoided if there had been more helicopters available.

The bonus payments have risen sharply even as the MoD’s record has come in for growing criticism. In 2003-04, total bonus payments were £24.9 million. >>> Rebecca Lefort and James Kirkup | Thursday, November 12, 2009

A Year After the Crunch, It's Boom Time Again for Bankers
A year after the global economy was brought close to collapse by reckless lending, investment banks are preparing to announce huge profits. Photo: Times Online
TIMES ONLINE: Investment bankers are about to enjoy a record bonus season as confidence surges in the financial markets.

Just 12 months after the global economy was brought close to collapse by reckless lending — forcing banks to turn to taxpayers for help — stock markets in London and New York are enjoying one of the strongest bull runs in decades and investment banks are preparing to announce huge profits.

In Britain, job losses slowed in the three months to August. Unemployment rose by 88,000 to 2.47 million, the lowest rise since July last year, and youth unemployment fell slightly. China reported strong trade figures and oil hit a high for the year.

Goldman Sachs, which employs 5,500 people in London, is expected to report a sharp rise in third-quarter profits today. Analysts estimate that, barring a major setback, the average London worker at Goldman will receive about $748,000 (£467,000) in salary and bonuses — 13 per cent higher than 2007 and more than double the 2008 average. >>> Patrick Hosking and Christine Seib | Thursday, October 15, 2009

THE TELEGRAPH: Goldman Sachs on track to pay out record $22bn as profits jump to $3.19bn: Goldman Sachs is under fresh fire after revealing its compensation pot is on track hit a record $22bn (£13.5bn) this year after the bank set aside more for pay and bonuses in nine months than in the whole of last year. >>> James Quinn, US Business Editor | Thursday, October 15, 2009

TIMES ONLINE: Goldman Sachs reignites pay row with 46% rise >>> Christine Seib in New York | Thursday, October 15, 2009

Bankers Are ‘Socially Useless’, Declares Head of City Watchdog
DAILY MAIL: The head of the financial watchdog has launched a stinging attack on bankers, mocking City traders and attacking their refusal to accept that the industry needs radical change.

Just weeks after declaring much of bankers' work 'socially useless', Lord Turner delivered a new broadside at a Mansion House banquet last night attended by the great and good of the Square Mile.

He told them the industry's collapse had been 'cooked up' on trading floors where workers earned exorbitant bonuses that regular victims of the recession could only dream of.

The peer insisted that only a huge transformation would allow banks to restore their reputations and rebuild their trust, such was the harm caused by their over-extension.

And he even went as far as to mock bankers for creating financial instruments that nobody wants or needs.

'No one wakes up on a Saturday morning and says I think I'll go out and buy one of those CDO squareds,' he said, referring to the exotic investments that helped bring the financial system to its knees.

'Banks need to refocus their energies, not on those over-complex products of no use to humanity... but on their core functions of providing savings and credit and payment products to customers.'

The atmosphere at the lavish banquet noticeably cooled as the peer spoke and he was even heckled three times about bonuses paid to FSA staff.

'Probably 60 per cent of the people in this room would willingly shoot Lord Turner over that speech,' one guest said afterwards, according to the Financial Times.

Within seconds of starting to speak, the FSA chairman made clear he had no intention of taking back his 'socially useless' claim made last month - for which he was branded a 'heretic' by City figures. 'I will not be recanting this evening', he said.

Lord Turner rejected accusations that he had undermined the industry's competitiveness with his earlier comments.

'It is not my job as chairman of the financial regulator to be the industry's cheerleader,' he declared pointedly.

He continued: 'British citizens will be burdened for many years with either higher taxes or cuts in public services because of an economic crisis... cooked up in trading rooms where many people earned annual bonuses equal to a lifetime's earnings of some of those suffering the consequences.'

He told bank bosses they needed to realise some activities - although profitable - are so unlikely to have a social benefit that they 'should voluntarily walk away from them'.

'Not all financial innovation is valuable, not all trading activity plays a useful role, and a bigger financial system is not necessarily a better one,' he said.

The peer - who used to be a banker - conceded that this might mean bank investments becoming more boring but said 'after the last year, there's a lot to be said for boring'.

He attacked those who wanted to pretend as if 'the near-death experience' of the last year had never happened. Returning to business as usual and risking a similar crisis was not an option, he insisted.

He also strongly endorsed the idea of linking bankers' pay to higher levels of capital held by banks so that they are never so exposed again.

The fresh attack left senior City figures fuming. >>> | Wednesday, September 23, 2009

Greed Is God Again, and We Have Learned Nothing
THE SYDNEY MORNING HERALD: New Zealand's conservative Prime Minister, John Key, a former investment banker, summed up the state of the world financial system brilliantly during a recent visit to Sydney: "Six months ago, The Wall Street Journal came to interview me and asked me if capitalism was dead. Now Goldman Sachs is paying record bonuses."

After a near-death experience, the world financial system is returning to business as usual - only worse.

The Group of 20 countries, meeting at the end of this week in Pittsburgh, is supposed to be restructuring the system so that it "never happens again". Or, as Barack Obama put it last week: "We will not go back to the days of reckless behaviour and unchecked excess that was at the heart of this crisis."

But we already are. Even if the G20 succeeds in every aspect of its well-intentioned agenda this week, the two greatest systemic problems stand unchanged and uncorrected.

The big investment banks, and Goldman Sachs is the biggest of them, have feasted on public money and, now, restored to strength, are throwing themselves back into the markets as recklessly as ever - only more so.

The big US investment banks are not just symbolic of the greed and excess of the pre-crisis craze. They were instrumental. They created, sold and traded the derivatives the world later came to know as "toxic assets''. But now, after restoring themselves with emergency government loans, they have repaid the US Treasury and rushed back into the markets. Goldman reported a record profit for the three months to the end of June of $US3.4 billion ($3.9 billion).

And the company - where average employee pay is $US700,000 - set aside a record $US11.4 billion for staff bonuses for the first half of the year alone. Guess where the firm made its biggest profit? From trading all the Treasury bonds the US Government issued to pay for the $US787 billion stimulus it injected into the economy to save it from the financial crisis.

Criticism of its bonuses sent Goldman's chief, Lloyd Blankfein (2007 salary plus bonus: $US70 million), out to give a contrite speech. But behind the facade, his firm was betting the bank once again. >>> Peter Hartcher* | Tuesday, September 22, 2009

*Peter Hartcher is the Herald's international editor and author of Bubble Man: Alan Greenspan and the Missing Seven Trillion Dollars

Human Filth! Human Garbage!
MAIL Online: City bankers are set to pocket huge bonuses again, despite bringing the world economy to the brink of ruin.

Goldman Sachs yesterday promised thousands of staff - 5,500 of them in the UK - a 33 per cent pay boost after it returned to profit.

Other banks are expected to follow suit after benefiting from trillions of pounds in government bailouts.

Last night angry MPs condemned what they said was 'business as usual' for City fat cats. Goldman Sachs was accused of 'taking the mickey' out of taxpayers with such massive bonuses during a global recession.

The Wall Street bank, bailed-out with £6.7billion from the U.S. government only last October, has raised its bonus and pay pool for the first three months of this year by 17 per cent, to £3.1billion. Sachs of Gold: Six Months after Bailout Costing Billions, Greedy Bankers Reward Themselves with a NEW Round of Huge Bonuses >>> By Simon Duke and Olinka Koster | Wednesday, April 5, 2009

Nine of AIG's Top Bonus Earners Agree to Repay Cash in Full
THE GUARDIAN: Nine of the top 10 recipients of ­controversial bonuses at the insurer AIG have pledged to hand back the money ­following a public and political outcry over multimillion-dollar rewards at the crisis-stricken company.

New York state's attorney general, Andrew Cuomo, revealed last night that most of the biggest winners from a ­controversial "retention scheme" at AIG have succumbed to pressure by forsaking their awards.

Of those working at AIG's financial products division, which ran up vast losses on toxic derivatives, 15 of the 20 top bonus winners are giving back the money.

Cuomo said: "A number of them have risen to the occasion and I applaud them."

The money being returned amounts to $30m out of the bonus scheme's total payout of $165m. Cuomo, speaking on a conference call, revealed that about $80m of the total went to Americans. Some of the rest is likely to have gone to British staff at AIG's key financial products office in London.

He expressed a hope that more bonuses would be returned and said he expected his office to recoup about $80m. >>> Andrew Clark in New York | Tuesday, March 24, 2009

Max Hastings: Seize Their Porches and Throw Them in Jail! Shameless Bankers Are Worse than Train Robbers
MAIL Online: The best suggestion of the past week about how to punish Sir Fred Goodwin is that he should be obliged to report personally at an RBS branch to collect his pension cheques. If customers do not lynch him, staff will.

But too much attention has focused on Goodwin.

Of course, he is contemptible. But he is only one among thousands of monstrously over-rewarded merchants of failure.

At least the former RBS chief executive is no longer at his desk. Almost all the others still occupy fat, padded chairs in City institutions. The time has come to address the entire robber banker culture.

Lord Turner’s impressive Financial Services Authority report this week promised an end of ‘light touch’ regulation. Turner makes plain his distaste for the City’s reward structure.

I would go much further. In dealing with the sort of people who have created a disaster which will cripple this country’s finances for decades to come, drastic sanctions will be necessary.

Statistics from America show that top executives of the seven biggest failed financial institutions have taken home $464 million in alleged performance pay since 2005, while their businesses have racked up $107 billion losses in the past two years alone.

British bankers have profited from rip-offs identical in kind, if not quite in scale.

Yet those responsible remain convinced they are entitled to seven-figure remuneration, even though it’s taxpayers who are having to stump up the money.

It is as if a man who has driven a Bentley into a brick wall demands that the manufacturer should present him with a new one, because it is the only car he is used to driving.

These bankers think they are above criticism and the lesson for us, the public, is that we need to get the boot in and keep kicking.

Only thus might we begin to change the wicked culture which has brought Western nations, Britain prominent among them, to the edge of ruin. >>> Max Hastings | Saturday, March 21, 2009

THE GUARDIAN: AIG Warns Staff to Travel in Pairs after Death Threats over Bonuses

Executives fear for safety after £115m payout / Hide firm's logo and park in lit areas, employees told

The embattled US insurance company AIG has warned its staff to travel in pairs after dark, not to wear company logos and to avoid discussing their work outside the office, as public outrage boils over at multimillion-dollar executive bonuses.

AIG's employees have been subjected to death threats since the company handed out $165m (£115m) in "retention" awards to employees in its disastrously loss-making financial products division this week.

Recipients of the bonuses said they feared for their own safety. A union-backed campaign group is today taking protesters on a bus tour of AIG executives' homes in a wealthy enclave of Connecticut known as the "gold coast".

In a leaked company-wide memo, AIG's corporate security team this week warned staff to take special precautions "due to a growing sense of public attention fuelled by increased media scrutiny".

The memo, posted on the New York website Gawker, urges staff to "avoid wearing any AIG apparel (bags, shirts, umbrellas etc) with the company insignia". It advises workers to take off identity badges when they go outside, to report the presence of any strangers, and to call the emergency services if they think they are being followed. "At night, when possible, travel in pairs and always park in well-lit areas," it reads. >>> Andrew Clark in New York | Saturday, March 21, 2009

INTERNATIONAL HERALD TRIBUNE: Goldman Defiant


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Good News! Barack Obama Attacks 'Outrage' of AIG Executive Bonuses
TIMES ONLINE: President Obama expressed outrage today over hefty bonus payments awarded to executives from the stricken insurance giant AIG and said that he had directed his Treasury Secretary to take all legal measures to block them.

The insurer received some $173 billion in government bailout money and is now paying $165 million in employee bonuses, prompting a storm of political protest that has echoes of the row in Britain over Sir Fred Goodwin's pension from RBS[.]

“This is a corporation that finds itself in financial distress due to recklessness and greed,” Mr Obama said of AIG in remarks at the White House.

“Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?”

Mr Obama said he had asked Timothy Geithner, the Treasury Secretary, to use the leverage the government had to pursue “every legal avenue” to push back against the bonus payments. >>> Philippe Naughton and Christine Seib in New York | Monday, March 16, 2009

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No Bonuses for Bankers Says David Cameron
David Cameron, the Conservative leader, has said that there should be no bonuses this year for senior staff at banks in which the Government holds a stake.


THE SUNDAY TELEGRAPH: He was speaking after The Sunday Telegraph disclosed that Lloyds Banking Group has drawn up plans to pay about £120 million in bonuses to staff even as it teeters on the brink of majority state ownership.

Sources close to Lloyds said the bank had drafted the bonus proposals and was "in consultation" about them with UK Financial Investments (UKFI), the Treasury body that owns a 43 per cent stake in the bank.

The revelations follow the disclosure last week that Royal Bank of Scotland, almost 70 per cent of which is owned by the taxpayer, was looking to pay staff as much as £1 billion in bonuses this year.

Mr Cameron said bonuses in future years should be paid in shares in the banks which can be cashed in only when it has entirely repaid the support it has received from the taxpayer.

He said he had no objection to bonuses of £1,000-£2,000 to low-ranking employees who have met targets and do not share the blame for the current financial crisis.

But the Tory leader told BBC1's The Politics Show: "For these banks that are owned by the taxpayer, or where the taxpayer has a large stake, it is completely wrong to be paying bonuses."

Mr Cameron said he raised the issue with Gordon Brown at the time of the banking bail-out in October, but the Prime Minister had been "asleep on the job". >>> By Duncan Gardham and Mark Kleinman | Sunday, February 15, 2009

THE SUNDAY TELEGRAPH: Gordon Brown Must Go, Says HBOS Whistleblower Paul Moore

Paul Moore, the bank whistleblower whose revelations forced the resignation of a senior Government adviser, has called for Prime Minister Gordon Brown to go for his part in creating the financial crisis.

Mr Moore, who was sacked after raising concerns over excessive risk-taking at HBOS, said Mr Brown should be "held accountable for his failure to oversee the stability of the country".

Following his explosive evidence to the Commons Treasury Committee last week, Mr Moore said he is planning to send the MPs a further dossier of 30 documents which will point the finger of blame for the bust at Mr Brown.

After Mr Moore's revelations forced the resignation of the deputy chairman of the Financial Services Authority Sir James Crosby, Mr Brown told another parliamentary committee that HBOS's massive losses - estimated at more than £10 billion - were caused not by Government policy but by the bank's flawed business model.

But Mr Moore, who was head of risk at HBOS from 2002 to 2005, today told the Independent on Sunday: "The failure goes right to the heart of the system - to the internal supervisory system and right to the top of government.

"Brown must go. He cannot remain in office. >>> | Sunday, February 15, 2009

THE SUNDAY TIMES: Ministers Take Tougher Line on Bank Bonuses

Ministers and the Opposition hardened their line against bank bonuses today amid suggestions that Lloyds intended to go ahead with payouts worth £120m this year.

Tony McNulty, Employment Minister, said that any bank employee who had responsibility for the disastrous business model adopted by the banks should "not get a penny". Junior staff should be able to get between £1,000 and £2,000, he said, but anyone with a significant involvement in the business model should be paid nothing extra at all. >>> Philip Webster, Political Editor, and Jenny Booth | Sunday, February 15, 2009

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A Sorry Parade of Bankers Can't Put Things Right
The Government wrecked both our private and our public finances and if Gordon Brown doesn't get a better grip of the banking industry, the IMF will have to do it for him, says Michael Fallon.

‘We are profoundly and, I think I can say, unreservedly, sorry at the turn of events” was how the former chairman of HBOS put it. “I think I can say, unreservedly”? “The turn of events”? Only somebody as deeply immersed in the British establishment as Lord Stevenson of Coddenham could get away with destroying a great British bank, taking £17 billion of taxpayers’ money, and then offering up the kind of shaded apology more appropriate for somebody caught out by a sudden cold snap.

This won’t do, and the parade of hapless bankers in front of the Treasury Committee last week did not give us the answers we need to the crisis in British banking. Instead, we were shown a sorry picture of a sales-driven, deals-driven, bonus-driven culture wholly alien from the banks our fathers knew. >>> By Michael Fallon | Saturday, February 14, 2009

THE (SUNDAY) TELEGRAPH: Lloyds Plan to Pay £120 Million in Bonuses to Staff Threatens New 'Fat Cat' Row

Lloyds banking group has drawn up plans to pay about £120 million in bonuses to staff even as it teeters on the brink of majority state ownership, The Sunday Telegraph has learned.

Sources close to Lloyds said the bank had drafted the bonus proposals and was "in consultation" about them with UK Financial Investments (UKFI), the Treasury body that owns a 43 per cent stake in the bank.

The proposed payouts would be distributed among thousands of workers in Lloyds' retail and commercial banking businesses, who received about £150 million in bonus payments last year.

They are likely to inflame the growing row over City bonuses which was stoked last week by The Sunday Telegraph's disclosure that Royal Bank of Scotland, almost 70 per cent of which is owned by the taxpayer, was looking to pay staff as much as £1 billion in bonuses this year.

The disclosure comes as the Government and Lloyds attempt to find a way to pump billions more of taxpayers' money into the troubled bank without the Government being forced to take a majority stake. >>> By Mark Kleinman, Patrick Hennessy and Edmund Conway in Rome | Saturday, February 14, 2009

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Obama Calls Wall Street Bonuses ‘Shameful’
THE NEW YORK TIMES: WASHINGTON — President Obama branded Wall Street bankers “shameful” on Thursday for giving themselves nearly $20 billion in bonuses as the economy was deteriorating and the government was spending billions to bail out some of the nation’s most prominent financial institutions.

“There will be time for them to make profits, and there will be time for them to get bonuses,” Mr. Obama said during an appearance in the Oval Office with Treasury Secretary Timothy F. Geithner. “Now’s not that time. And that’s a message that I intend to send directly to them, I expect Secretary Geithner to send to them.”

It was a pointed — if calculated — flash of anger from the president, who frequently railed against excesses in executive compensation on the campaign trail. He struck his populist tone as he confronted the possibility of having to ask Congress for additional large sums of money, beyond the $700 billion already authorized, to prop up the financial system, even as he pushes Congress to move quickly on a separate economic stimulus package that could cost taxpayers as much as $900 billion.

This week alone, American companies reported as many as 65,000 job cuts, and public anger is rising over reports of profligate spending by banks and investment firms that are receiving help from the $700 billion bailout fund. About half of that money is still available, but the new administration has yet to announce how it will use it, and many analysts think it will take far more to stabilize the banking system. >>> By SHERYL GAY STOLBERG and STEPHEN LABATON | Thursday, January 29, 2009

leJDD.fr: Wall Street: Obama voit rouge

Rien ne va plus entre Wall Street et Barack Obama. Le 44e président des Etats-Unis a jugé tout simplement "honteux" les bonus versés par les groupes financiers à leurs salariés en 2008: 18,4 milliards de dollars. "C'est le comble de l'irresponsabilité", a-t-il insisté, appelant les "gens de Wall Street" à faire "preuve de retenue, de discipline et de davantage de sens des responsabilités".

18,4 milliards de dollars. C'est la somme de la discorde entre Barack Obama et Wall Street. Mercredi, les autorités de l'Etat de New York ont indiqué que les établissements de Wall Street avaient versé 18,4 milliards de dollars de primes à leurs salariés en 2008. Un chiffre certes en recul de 44% par rapport à 2007 - 32,9 milliards de dollars - mais qui reste le sixième record de l'histoire de Wall Street en valeur absolue. Le montant a de quoi surprendre en pleine crise économique et alors que l'administration Bush a lancé à l'automne un vaste plan de soutien au secteur financier d'une valeur totale de 700 milliards de dollars.

Selon le Wall Street Journal, l'équipe Obama envisage même de rajouter 1000 à 2000 milliards de dollars au plan Paulson. Dans ce contexte, on comprend bien pourquoi à la Maison blanche, ces primes ont dû mal à passer. Son nouveau pensionnaire a tout simplement jugé "honteux" le niveau des bonus en 2008. "Au moment où la plupart de ces institutions étaient près de s'effondrer et où elles demandent l'aide des contribuables pour les soutenir, et où les contribuables eux-mêmes sont dans une situation difficile parce que le système tout entier pourrait leur tomber sur la tête s'ils ne leur venaient pas en aide, c'est le comble de l'irresponsabilité, c'est honteux", a-t-il asséné. >>> Par Marianne ENAULT, leJDD.fr | Vendredi 30 Janvier 2009

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