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

THE SUNDAY TIMES: Golden goodbye for bank bosses: Outgoing chief executives at HSBC, Lloyds and Barclays will pocket millions from highly lucrative advisory contracts >>> Iain Dey | Sunday, January 16, 2011 (£)

Mark Steel: We Owe It to Bankers to Feel Their Pain
THE INDEPENDENT: At last someone has dared to defend the oppressed people of the banking community. Bob Diamond, chief executive of Barclays, who himself has to suffer the trauma of an £8m bonus, said yesterday that the bankers' "period of remorse and apology should be over". And you feel his pain, because the first words to cross your mind when you see a banker are "remorseful and apologetic". Then you're left worrying, "Oh, how I wish the poor souls were slightly less burdened with remorse about their bonus, and didn't apologise with such agonising sincerity about putting it into their wife's name in a series of untraceable accounts based in uninhabitable islands off Ecuador."

But at last they've learnt to stand up for themselves, and Bob Diamond has emerged as their Martin Luther King. Soon the whole banking community will declare: "Say it out loud, I'm 27 million quid in the black and I'm proud." >>> Mark Steel | Wednesday, January 12, 2011

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

Another £6bn for Goldman Bankers: They're Picking Up an Average of £350,000-plus
MAIL ONLINE: Goldman Sachs is today expected to earmark almost £6billion for its annual salary and bonus pool, handing staff a 15 per cent pay rise.

The windfall means Goldman bankers will take home an average of £356,000 this year.

Many senior deal-makers and star traders will pocket seven or even eight-figure packages, despite the bank's pivotal role in the financial crisis.

The payouts - to be confirmed in the group's financial results for the first half of the year - are likely to anger taxpayers here and in the U.S.

They come days after the Wall Street giant agreed to pay a £356million penalty to settle one of the most explosive fraud cases in U.S. banking history.

Goldman cut a face-saving deal with America's financial watchdog after it was charged with tricking clients into buying an investment that was designed to collapse.

Government-controlled Royal Bank of Scotland lost about £550million in this way, effectively leaving British taxpayers out of pocket.

Goldman is expected to set aside as much as 45 per cent of its first-half turnover for salary and bonuses.

Although markets have been shaken by the eurozone debt crisis, Goldman's turnover is forecast to hit £13.2billion, meaning £5.9billion will be channelled into the pay pool.

For the typical worker at Goldman, this equates to some £178,000 for just six months work. >>> Simon Duke | Tuesday, July 20, 2010

Once Again, the French Are Leading the Way*! French Billionaire Antoine Zacharias Faces Criminal Trial Over Pay Deal
THE TELEGRAPH: A French millionaire [billionaire?] has become the first person in the country to go on trial for being paid too much, in a ground-breaking move against "corporate greed".

Antoine Zacharias is facing criminal charges. Photo: The Telegraph
Antoine Zacharias is facing criminal charges despite the £90 million pay and pension deal being approved by his company’s directors.

He is accused of misusing funds by accepting the money to run Vinci, the world’s biggest construction company.

The sum was set by a remuneration committee chaired by Quentin Davies, Britain’s junior Defence Minister.

Mr Zacharias, 71, is the first French industry captain to face criminal charges over earnings and faces up to five years in prison and a fine of £336,000.

French bosses are anxiously awaiting the outcome of the two-day trial at the court in Nanterre outside Paris, as a guilty verdict could lead to a wave of prosecutions in France over executive pay.

France is notoriously mistrustful of its patrons, and the country was hit by a wave of “boss-nappings” last year in the wake of the financial crisis.

Under French law, company bosses can be prosecuted for misusing funds. However, this is the first time a case has been brought against someone who appeared to have acted within company rules on pay.

Hailed as France’s boss of the decade by the Harvard Business Review, Mr Zacharias transformed Vinci into a construction powerhouse, raising profits by more than 300 per cent and turnover by 81 per cent in six years.

But in 2006 he was ousted by his number two, and successor, who accused him of corporate greed. >>> Henry Samuel in Paris | Thursday, March 25, 2010

*We, the British, should follow suit, as should the Americans. In fact, this should happen wherever corporate greed is a problem. What about jailing and punishing severely those fat cat, greedy bankers? Five to ten years in the slammer would do them a world of good. It would sober them up. They would become examples for all the others just waiting to milk (shouldn’t that be cream?) the system. You’d soon find that corporate greed would become a thing of the past if these ‘can’t-get-enough-types’ were put through their paces in clink. Let the show begin! – © Mark

HSBC Hands Top Banker £9 million Bonus
TIMES ONLINE: One of the biggest bonuses seen this year for any London-based banker was revealed today as HSBC announced it had given Stuart Gulliver, its head of investment banking, a £9.8 million package.

Mr Gulliver was awarded a £9 million bonus on top of his £800,000 base pay for his "exceptional performance" in trebling the profits of his division to $10.5 billion, HSBC said.

The payment came as Michael Geoghegan, HSBC chief executive, confirmed that he will give his £4 million bonus to charity.

HSBC disappointed investors after full-year profits fell by 24 per cent to $7.1 billion (£4.7 billion) following a big write down of the value of its own bonds. Its shares lost more than 5 per cent, down 37.1p, to 682.46p. >>> Patrick Hosking and Catherine Boyle | Monday, March 01, 2010

MPs Blast 'Ridiculous' Pay in RBS Bonus Row
TIMES ONLINE: Politicians rounded today on Royal Bank of Scotland (RBS), the state-owned lender, over its decision to pay up to £1.7 billion in bonuses to bankers despite making a £3.6 billion loss during 2009.

The bank announced today that it would pay investments bankers from a £1.3 billion bonus pool while other staff would share in a £400 million reward.

George Osborne, the Shadow Chancellor, said that bankers’ pay had reached “ridiculous levels”, adding: “We have just got to look at the whole banking sector and try to bring this pay down.”

RBS’s loss for the 12 months to December 31 is less than the £5 billion expected and far below the £24.3 billion loss that RBS reported for 2008, a record for any British company.

But Vince Cable, the Liberal Democrat Treasury spokesman, said: “RBS rewarding individual bankers is like a football team paying their striker for scoring when they’ve just been relegated."

RBS is 84 per cent owned by the British taxpayer after receiving billions of pounds of rescue funds from the state during the recession to save it from collapse.

The UKFI, the body set up by the Government to manage the state’s investment in British banks, yesterday granted RBS permission to pay the bonuses. >>> Francesca Steele | Thursday, February 25, 2010

Thanks for the Bailout! Wall Street Bonuses Up 17 Percent: DiNapoli
NEW YORK POST: ALBANY, N.Y. — Wall Street bonuses were up 17 percent to over $20 billion in 2009, the year taxpayers bailed out the financial sector after its meltdown, New York state Comptroller Thomas DiNapoli said today.

Total compensation at the largest securities firms grew beyond that figure and profits could surpass what he calls an unprecedented $55 billion last year, DiNapoli said. That's nearly three times Wall Street's record increase, a rate of growth that is boosted in part by the record losses in 2008 of nearly $43 billion, the Democrat said.

"Wall Street is vital to New York's economy, and the dollars generated by the industry help the state's bottom line," said DiNapoli. "But for most Americans, these huge bonuses are a bitter pill and hard to comprehend. ... Taxpayers bailed them out, and now they're back making money while many New York families are still struggling to make ends meet." >>> AP | Tuesday, February 23, 2010

Stephen Hester Lines Up £1.6m RBS Bonus
RBS cheif executive Stephen Hester. Photograph: The Sunday Times
THE SUNDAY TIMES: Taxpayer banks set to report £12bn losses as bosses agonise over their big bonus payouts

STEPHEN HESTER, chief executive of Royal Bank of Scotland, is in line to collect a bonus of up to £1.6m despite the bank posting losses of several billion pounds.

Talks over the bumper payout are expected to reach a conclusion within days and could be announced alongside the bank’s results later this week.

Although the 49-year-old has yet to make a final decision on whether to accept the pay deal, it is understood that the conditions in his contract would permit a large payout.

The deal comes amid continuing controversy over bonuses at taxpayer-backed banks. RBS, 84%-owned by the state thanks to huge injections of government funds, will confirm this week that it is to pay out £1.32 billion in bonuses to its investment bankers.

Lloyds Banking Group is expected to award £200m to its staff and is on a collision course with investors over a bonus for Eric Daniels, its chief executive.

The payments come against a stark financial backdrop at the two banks. Lloyds and RBS are expected to post combined losses of about £12 billion this week, following enormous charges for bad debts. >>> Iain Dey and Dominic O’Connell | Sunday, February 21, 2010

Banks Told to Comply on Bonuses or Lose UK Banking Licences in Shock FSA Ultimatum
THE TELEGRAPH: Investment banks have been told that every bonus issued must comply with the regulatory guidelines – or they face having their licences to operate in Britain revoked.

In an extraordinary ultimatum that has shocked some of the City's biggest companies, the Financial Services Authority (FSA) told bank bosses that 60pc of all pay must be deferred, with no exceptions, even for those whose contracts conflicting [sic] with the edict.

Many of the global players have in recent weeks made representations to the City watchdog, in particular about pre-existing employment contracts that guarantee bonuses over a year or more. But their appeals have been met with the FSA's toughest yet response.

One pay executive in a major bank told The Daily Telegraph: "The message came back that while the FSA agreed that it does not have jurisdiction over contractual law, it does have jurisdiction over issuing bank licences in London, and that we should go away and unwind the contracts."

Bankers at Merrill Lynch are among the first affected. Those with pre-existing contracts were told about the FSA's tough stance on Friday when their bonuses were agreed.

One Merrill Lynch employee said: "We thought that contracts would be immune from changes but were told by bosses that their hands were tied and there was nothing they could do, the regulator had put its foot down."

Banks that have not yet told staff about the bonus payouts are now scrambling to ensure that they are comply with the FSA rules.

Senior directors are concerned that the stance could result in the banks facing a series of legal challenges from individuals with pre-existing contracts. Headhunters say that banks including Barclays Capital and Nomura have lured star performers by offering them large guaranteed bonuses.

One headhunter said: "Many of these contracts have guarantees that 50pc of the bonus will be paid in cash. These are tricky things to unpick. But cleverly, the FSA has put the onus on the banks to unwind the contracts, rather than itself getting embroiled in a complex legal row." >>> Louise Armitstead and Helia Ebrahimi | Wednesday, February 03, 2010

Why Don’t They Jail the SOBs and Wipe the Smile Off Their Faces?
Lloyd C. Blankfein was paid $67.9 million in 2007. His bank’s profits in 2009 were higher than that year. Photograph: Times Online
TIMES ONLINE: Goldman Sachs, the world’s richest investment bank, could be about to pay its chief executive a bumper bonus of up to $100 million in defiance of moves by President Obama to take action against such payouts.

Bankers in Davos for the World Economic Forum (WEF) told The Times yesterday they understood that Lloyd Blankfein and other top Goldman bankers outside Britain were set to receive some of the bank’s biggest-ever payouts. “This is Lloyd thumbing his nose at Obama,” said a banker at one of Goldman’s rivals.

Goldman Sachs is becoming the focus of an increasingly acrimonious political and financial showdown over the payment of multimillion-pound bonuses.Last week the US President described bonuses paid out by some banks as “the height of irresponsibility” and “shameful”.

“The American people understand that we have a big hole to dig ourselves out of, but they do not like the idea that people are digging a bigger hole, even as they are being asked to fill it up,” he said last week. Lloyd Blankfein of Goldman Sachs 'Expecting $100 Million Bonus' >>> Helen Power in Davos | Monday, February 01, 2010

Lobbyists Prepare for Battle with President Obama Over Bank ‘Fat Cat’ Curbs
A protester outside the Goldman Sachs headquarters in New York. Photo: Times Online
TIMES ONLINE: Banking industry lobbyists are preparing to do battle, buoyed by a landmark US Supreme Court ruling striking down limits on corporations’ political spending, against the ambitious and agressive plans laid on Thursday by President Obama.

Despite the pointed attacks made by the President on the “army of industry lobbyists from Wall Street”, the Financial Services Roundtable, a body which represents 100 of the largest financial firms, said that Mr Obama’s proposal would do little to protect consumers.

“The proposal will restrict lending, increase risk, decrease stability in the system, and limit our ability to help create jobs,” said Steve Bartlett, chief executive of the roundtable.

Individual bankers by and large kept quiet, preferring to weigh up the best response in private. As they did so, Mr Obama flew to the struggling rust-belt state of Ohio in hope that the attack would re-energise his popularity in middle America.

In Washington the attack on bankers was seen as a “policy pivot” designed to accommodate voters’ populist rage after the Democrats’ loss of Edward Kennedy’s Senate seat in Massachusetts. “I’ll never stop fighting for you. I’ll take my lumps, too,” Mr Obama told an audience in Elyria, at the start of a day of campaign-style events aimed at reinvigorating the Democrats before the November mid-term elections.

The President has become increasingly strident about what he calls the “fat cats” in the big banks as the American public has reacted with revulsion to big bonuses being handed out in Wall Street. Mr Obama’s political capital is dwindling, however, after the Democrats’ loss on Tuesday of the 60-seat “super-majority” that enables them to overcome a Republican filibuster in the Senate.

Yesterday, the Senate was forced to postpone the confirmation of Ben Bernanke for a new term as Federal Reserve chairman after two more Democratic senators said that they would join a revolt against him. >>> James Bone in New York | Saturday, January 23, 2010

Wall Street Giants Pay Staff $100bn
THE SUNDAY TIMES: FOUR of Wall Street’s biggest banks will this week reveal plans to pay their staff a total of close to $100 billion (£62 billion), reigniting the row over bankers’ bonuses.

Goldman Sachs, Morgan Stanley, Citigroup and Bank of America Merrill Lynch are all expected to announce bumper pay awards for staff alongside full-year results.

Wall Street’s big payouts come as the remuneration committee at Royal Bank of Scotland prepares to meet this week to determine the size of its bonus pot.

RBS — 84%-owned by British taxpayers — has indicated it wants to pay its investment bankers about £1.5 billion in bonuses, even though it will make a loss this year at group level. The figure could creep higher if it attempts to shelter its bankers from the impact of Alistair Darling’s 50% tax on bonuses. >>> Iain Dey | Sunday, January 17, 2010

Even My Parents Think I'm Overpaid, Admits RBS Chief Executive
THE GUARDIAN: But Stephen Hester tells MPs that although his bonus package could be worth up to £10m, it is currently worthless as shares in the state-controlled bank have failed to rise

Stephen Hester giving evidence to the Treasury select committee today. Photo: The Guardian
Stephen Hester, chief executive of Royal Bank of Scotland, admitted today that his parents believe he is paid too much as he stressed that his bonus package was currently worthless because the bank's shares had failed to rise.

Asked by the Treasury select committee of MPs whether he understood why the government wants to restrict bonuses at the state-controlled bank, Hester replied: "Yes".

He insisted that the bank did not yet know the size of the bonus pot that would be split between its 22,000 investment bankers. Hester also revealed that a "handful" of highly paid bankers would avoid the restriction placed on the bank not to pay cash bonuses to anyone earning more than £39,000 because of legal commitments made to them.

He told the MPs, who are also taking evidence from his counterparts at Lloyds Banking Group and Northern Rock, that his "biggest single business problem" was recruiting people who were concerned about the criticism they might encounter if they work for RBS.

Institutional investors had "raised concerns about our ability to keep and motivate good people".

The bank would not tell staff whether they will get a bonus and how large it would be until the end of February, he said.

The Treasury has a power to veto bonuses at the bank under the terms of insuring £282bn of troubled loans through the asset protection scheme (APS). Hester insisted no board directors have threatened to resign as a result of this restriction and insisted he wanted to pay "the minimum possible while keeping staff engaged".

Of his own pay deal, which is linked to the RBS share price but could be worth almost £10m over three years, Hester said: "If you ask my mother and father about my pay they'd say it was too high as well, so some people close to me have that view of bankers." >>> Jill Treanor | Tuesday, January 12, 2010

THE GUARDIAN – BUSINESS BLOG: Bank pay row reaches a crescendo: Banks are preparing to snub the politicians and begin a bumper bonus round later this week. First they have to brave a few final assaults: Obama's threatened tax in America and the House of Commons Treasury committee >>> Dan Roberts | Tuesday, January 12, 2010

France Follows Britain with Bank Bonus Tax
TIMES ONLINE: France is preparing to follow Britain's lead with a one-off 50 per cent tax on bankers' bonuses, according to a French Government source.

President Sarkozy is said to have agreed to include a levy on pay-outs of more than €27,000 in the French budget or in a forthcoming law on regulation of the financial services industry.

The tax will be paid by banks, according to the source.

A spokesman for Mr Sarkozy confirmed that he was planning a special tax on bank bonuses but added that the details had yet to be finalised, suggesting that the French head of state might yet row back from the 50 per cent rate.

The move comes after Britain announced a one-off tax on bonuses over £25,000. It follows a call a by Gordon Brown and Mr Sarkozy for a global levy on bank pay-outs in a joint article in the Wall Street Journal today.

''We agree that a one-off tax in relation to bonuses should be considered a priority, due to the fact that bonuses for 2009 have arisen partly because of government support for the banking system," the two leaders wrote.

'It is clear the action that must be taken must be at a global level. No one territory can be expected to or be able to act on its own." >>> Adam Sage in Paris and Emily Ford | Thursday, December 10, 2009

Supertax to Claw Back Bankers' Huge Bonuses
Photo: Times Online
TIMES ONLINE: Alistair Darling is preparing to introduce a punitive new tax on bankers’ bonuses in a Pre-Budget Report that will draw the battle lines for the next general election.

The Chancellor is expected to argue that, because billions of pounds of public cash was used to bail out the financial sector, taxpayers have a right to a larger share of bankers’ payouts.

Accountants expressed doubts over the practicality of such a tax, claiming that it could breach human rights.

Yesterday Mr Darling said that voters would expect “the broadest shoulders to bear the greatest burden” when it came to restoring the public finances. Although final details have yet to be agreed, it is understood that he has bowed to pressure from Gordon Brown and is considering a supertax on individual bankers who receive bonuses over a certain level.

John Whiting, tax partner with PricewaterhouseCoopers, said that it was unprecedented for a particular occupation to be targeted in this way. “This is difficult on several levels,” he said. “It smacks of discrimination.” >>> Francis Elliott, Deputy Political Editor, and Patrick Hosking, Financial Editor | Monday, December 07, 2009

MAIL ONLINE: 'Super tax' on bank bonuses: After fury over huge payouts, Alistair Darling to target City fat cats >>> James Chapman | Monday, December 07, 2009

BBC: Banks criticise plans for windfall tax on bonuses: British banking chiefs have reacted angrily to news the Treasury is considering a one-year windfall tax on bonuses paid to some UK-based bankers. >>> | Monday, December 07, 2009

Addicted to Bonuses: The Fat Slobs at RBS Just Can’t Get Enough
Bonus showdown: Stephen Hester, Chief Executive of Royal Bank of Scotland. Photo: Mail Online
MAIL ONLINE: Royal Bank of Scotland directors were accused of holding taxpayers to ransom last night over plans to pay huge bonuses.

The board has threatened to resign en masse if the Treasury blocks the payments.

The row is over an estimated £1.5billion bonus pool for staff at the investment arm of the bank, which is largely owned by the public.

The pool is around 50 per cent bigger than last year and would give 20,000 bankers the equivalent of three times the national average salary each.

The Treasury has demanded a veto, following the taxpayers' £45billion bailout of the Edinburgh institution, but board members say their lawyers tell them they would have to resign if they lost the power to set pay levels.

It is an astonishing challenge to the Government, whose stake in the bank is set to rise to 84 per cent in the coming weeks.

Liberal Democrat spokesman Vince Cable said: 'I would welcome their resignations as they cannot hold the taxpayer to ransom. It's absolutely right that the government should impose bonus discipline on this bank.'

'As a state-run bank, the Government must finally take control and ensure that both its pay and lending practices are in the public interest.' Held to ransom by the bankers: Bosses at RBS (Yes, YOU own it) threaten to quit if they can't dole out huge bonuses >>> Simon Duke | Wednesday, December 02, 2009

THE TELEGRAPH: Lord Myners: 5,000 bankers earn more than £1m: At least 5,000 bankers will earn more than £1 million this year, according to the Government's City minister Lord Myners. >>> Harry Wallop, Consumer Affairs Editor | Wednesday, December 02, 2009

The Barefaced Greed of Bankers and Their Bonuses Beggars Belief
THE TELEGRAPH: City pockets are bulging with bonuses, says Boris Johnson. Have the banks no shame?

Photo: The Telegraph
If you pressed a rifle into the hand of the man in the street and asked him to choose between two targets – an MP or a banker – who do you think would get the bullet? Tricky, eh? It is hard to know which of these two formerly respectable professions has fallen further in public esteem.

Some people might hesitate, like Buridan's ass, the rifle barrel weaving indecisively between two such luscious hate-objects. Most people would simply call for two bullets.

But then let me ask you a slightly different question. Which of the two species has managed to steer itself most effectively through the crisis? Which type of cockroach has scuttled through the nuclear blast of public disapproval? On the face of it, there is an obvious answer, and it is getting more blatant by the day.

Most of the MPs I know seem to be in a state of nervous collapse. Some of them are on suicide watch. Some of them face the task of sacking their wives and selling the house, or possibly the other way round. Some face penury. Never has Parliament been subjected to such protracted humiliation at the hands of the people.

Then look at the bankers, the bankers whose high-rolling risk-taking triggered the recession that has so exacerbated public rage at MPs. The bankers seem to be waltzing off with a song on their lips and their hands in their pockets – at least, their hands would be in their pockets if they were not stuffed with money. And when I say stuffed, I mean bulging, bursting, ballooning with the biggest bonuses you ever saw.

London estate agents say they cannot believe the wheelbarrows of dosh that are suddenly crashing through their doors. Savills says the number of buyers from the financial services sector has risen by 48 per cent in the third quarter of this year, purely in the expectation of yet another ginormous Christmas bonus.

A knuckle-cracking realtor in Knight Frank's Kensington office says he has never seen anything like it: email after email from the boys and girls at Goldman Sachs. "We did our first Goldman's deal in June," he tells the FT, "and we are now doing five times as many for its employees as for any other bank." >>> Boris Johnson | Monday, October 19, 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