IMF chief scandalised by large bonuses at US banks
THE return of large bonuses for employees of US banks is a scandal, International Monetary Fund (IMF) managing director Dominique Strauss-Kahn said yesterday.
“Frankly, I’m scandalised by what I’m seeing,” he said in an interview with France 24 television when asked whether he was concerned about large bonuses. He said they encouraged risky behaviour that helped lead to the financial crisis.
Recent bumper profits for banks including Goldman Sachs and JP Morgan have raised concerns among some politicians that banks have not sufficiently changed their business practices in the wake of the financial crisis.
It emerged that Goldman staff were in line for an average pay packet of $1m (£612,000) each this year, after the bank reported a profit of $3.44bn for the three months to June, up 64 per cent on the same period in 2008.
A week later Wall Street chief executive Jamie Dimon booked a 36 per cent surge in JP Morgan’s second-quarter profits to $27.7bn thanks in part to strong investment banking revenues.