Commentaries

The Fed’s phony war on bonuses

September 18, 2009

Any attack on bank bonuses is going to be a reliable crowd pleaser. So a Federal Reserve proposal to meddle in Wall Street pay would make a good deal of political sense.

There he goes again…

By Paul Taylor
September 14, 2009

sarkobamaHo hum! Another G20 summit, another Sarkozy walkout threat.

The French president’s menaces to throw his toys out of his pram have become a regular feature of the run-up to each meeting of the world’s leading economic powers, making them a much debased coinage.  Sarko’s strops are now as routine a precursor to G20 gatherings as the vacuuming of red carpet or the deployment of flower arrangements.

Investment banker admits: we overcharge

August 28, 2009

On the FT’s letters page, Robert Pickering tackles the familiar theme of bank profits and bonuses. The reason banks pay their employees so much, he argues, is because they make large profits. But why are their profits so large? 

Turner is right to take on swollen banks

August 27, 2009

So the watchdog can bark after all. Adair Turner, chairman of Britain’s Financial Services Authority, says the financial sector has “swollen beyond its socially useful size”. That is a striking statement for any financial regulator, particularly one that counts promoting London’s financial centre as one of its goals. Identifying the problem, however, is the easy bit. Reversing decades of financial expansion will require global agreement on tough new rules, and the determination to make sure they are consistently enforced.

Sarkozy walks the walk on bonuses

August 25, 2009

Nicolas Sarkozy’s plans to reform bank bonuses are out, and for once there appears to be some substance to the French President’s flamboyant style:

Credit Suisse toxic bonus pool not that hot

August 7, 2009

The 17% return on the Credit Suisse toxic bonus pool so far this year, as reported by the Wall Street Journal, surely soothed hard feelings among bankers who were outraged in December when the bank told 2,000 of them that  bonuses would be linked to the performance of risky leveraged loans and commercial mortgage-backed  securities dumped into a pool called the partner asset facility.

Toxic bonuses, Credit Suisse’s one hit wonder

August 7, 2009

Credit SuisseAt the height of the financial crisis, Credit Suisse came up with a clever idea to offload dodgy assets without having to sell them at knock-down prices. It stuffed $5 billion of them into a bonus pool for its bankers.

Come on Massey: man or mouse?

August 4, 2009

Bank of America’s settlement with the Securities and Exchange Commission sheds some light on the shambolic merger agreement the bank struck with Merrill Lynch last autumn, and how it neglected to inform its own investors of the monster bonuses it then allowed Merrill to carry off.

John Thain was right

August 3, 2009

John Thain has been pilloried for the billions of dollars in bonuses paid to Merrill Lynch employees despite the firm’s $27.6 billion loss for 2008. He has taken the brunt of the criticism because Bank of America has said that the decision to pay $3.6 billion in Merrill bonuses before the end of the year, before the deal closed, was solely Thain’s. The former Merrill CEO has protested, telling the Wall Street Journal in April that “the suggestion Bank of America was not heavily involved in this process, and that I alone made these decisions, is simply not true.”

Crazy money

July 30, 2009

Wall Street pay is so extreme, so removed from what nearly everyone else thinks is within the boundaries of reasonable compensation, that one can be jaded by the continued talk of sky-high bonuses. Even when the absurdity of the pay practices are pointed out — as it is in a new report from the New York attorney general’s office: