January 23rd, 2010
(Express) – GREEDY bankers are still paying themselves huge bonuses in an arrogant disregard of the anger felt by millions of people who are battling to survive the recession.
There was outrage last night after Goldman Sachs announced a 48 per cent rise in pay and bonuses – and then claimed it was showing “restraint”.
The banking giant’s 5,500 UK staff are set to pocket an average £308,000 each this year from the firm’s £10billion pay pot. Many of the company’s top performers will see bonuses running into millions of pounds.
The news comes as employment figures show tens of thousands of Britons have been forced to work part-time to save their jobs.
It reveals the failure of Chancellor Alistair Darling’s attempt to curb City excesses with a one-off 50 per cent super-tax on bonuses.
And it comes as President Barack Obama vowed to break up big banks to prevent a return to the “old practices” that started the financial meltdown.
The President said: “While the financial system is far stronger today than it was one year ago, it is still operating under the exact same rules that led to its near collapse.”
The crackdown, which involves a whole series of measures to restrict the banks’ trading activities, sent Wall Street and the British FTSE share indexes crashing yesterday. Last night critics hit out at Goldman Sachs which narrowly avoided total collapse thanks to a £6.2billion bailout.
When the pay pot was announced, Vince Cable, the Lib Dem Treasury spokesman said: “People will be rightly furious to see Goldman Sachs paying out bumper bonuses after it was bailed out by the US government. It is farcical that so soon after the reckless greed of bankers brought the world economy to its knees, we are seeing a return to business as usual.
“There is a fundamental problem that the banks which made it through the credit crunch can now operate in a near monopoly, with government backing, and reap massive profits.
“Bankers should spare a thought for taxpayers who bailed the system out, some of whom no longer have jobs.” Mr Cable backed the US president’s plans to limit banks’ growth and called on the UK to follow.
“Barack Obama understands that the bonus culture in the banking system has got entirely out of hand and must be curbed.” He added: “We must break up British banks to ensure that taxpayers are not forced to underwrite unnecessary risks and to make the system more competitive.”
Brendan Barber, the TUC general secretary, condemned the US bank for its “mega-bonuses”. He said: “Goldman Sachs wants us to believe that its bonus payouts are modest. The truth is that we have set up an international welfare state for super-rich bankers. They pay themselves mega bonuses when times are good and expect the rest of us to bail them out when times are tough – even though it was the finance sector that has thrown the world into recession.”
Goldman Sachs has a global workforce of more than 32,000 staff including 5,500 in London. It took the £6.2billion public handout in 2007 but has since paid the money back with interest. The downturn had forced the bank to reign itself in one year, limiting staff payouts to around £208,000 on average in 2008, down from £409,300 in 2007. But the restraint was forgotten yesterday when the Wall Street giant announced a staggering five-fold increase in profits from £1.4billion in 2008 to £82billion last year.
Goldman Sachs attempted to dampen the mounting anger, saying the size of this year’s pay pot was a smaller percentage of its revenue than last year’s.
It also said it was set to pay “several hundreds of millions of dollars” to the UK Treasury through the Chancellor’s super-tax.
Source: Express Co UK