In the next two weeks, some of the world’s largest investment banks are expected to pay out more than $65 billion in salaries and bonuses.
The Guardian notes that this move “reinforces the view that it is business as usual on Wall Street and in New York barely a year since the taxpayer bailout of the banking system.” Liberal Democrat Treasury spokesman, Lord Oakeshott, described the size of the potential bonuses as “global greed by banks when global governance has failed. Britain’s bonus tax only toys with the symptoms of the sickness, not its cause. These last few investment banks left standing have state-backed licenses to print money so they must pay super tax on their super profits, not hold taxpayers to ransom.”
According to The Guardian, major US investment banks are supposed to report their full-year trading performance in the next two weeks, beginning with P Morgan and followed by companies such as Goldman Sachs and Morgan Stanley, among others. Numbers which have already been published by the five highest-profile banks show that “they have already set aside $50 billion to pay their staff in the first nine months of 2010. Towards the end of 2010, its estimated that approximately $10 billion will have been “put aside by Goldman Sachs, Morgan Stanley, and JP Morgan, even though 2009 was the worst year for the US economy in 30 years.”
The banks report that they will need the so-called compensation as it will include a number of costs including “salary and benefits which are paid throughout the year, as well as the one-off cost of bonuses. Staff at the banks will be informed of their bonus payouts in the coming fortnight although they may not receive the payments for a few more months.”