More on Banks in the Bailout Paying Big Bonuses

I wrote a few days ago about this being on CNN and wondered why it wasn't getting more play (see October 25, 2008 post)...well finally someone in the UK is writing about it.

Here is a snippet...read the full article at: http://www.guardian.co.uk/business/2008/nov/01/royal-bank-scotland-vincent-cable

"Several US politicians have seized on an investigation by the Guardian last month which showed six Wall Street banks - Goldman Sachs, Citigroup, Morgan Stanley, JP Morgan, Merrill Lynch and Lehman Brothers - had set aside $70bn ... in pay and bonuses for the first nine months of the year. (emphasis is mine)

Five are in line to benefit from a $700bn US taxpayer bail-out. The sixth, Lehman Brothers, has collapsed - though not without securing considerable bonus payouts for staff in the US.

Henry Waxman, chairman of the House oversight committee, wrote to chief executives of America's nine largest banks this week asking them to hand over information about their pay and bonus plans.

In his letter Waxman cites the Guardian report and says: "Some experts have suggested that a significant percentage of [bankers' pay] could come in year-end bonuses and that the size of the bonuses will be significantly enhanced as a result of the infusion of taxpayer funds."

Staff costs at RBS's investment banking division include salaries already paid in the first six months of the year, national insurance and profit-sharing contributions as well as funds earmarked for end-of-year bonuses. The sum set aside is 20% lower than the equivalent figure for the first six months of 2007.

Banking sources privately acknowledge that the sight of these bonus accruals may provoke anger. They concede the industry's pay and bonus regime is under unprecedented strain as it fails to reflect profitability, asset writedowns or share price declines." (Emphasis is mine!)

UH, YEAH! $70 BILLION in pay and bonuses to the people that caused this financial melt-down?