Goldmann Sachs pays for past mistakes
Goldmann Sachs has offered $500m to help small businesses beat the recession – but will stick with plans to award top dealers multi-millon dollar bonus payments. The bank has pledged the money – equivalent to 2.3% of its bonus and pay pool for 2009 – spread equally over five years to help put US 10,000 small businesses with advise, venture capital and technical assistance.
Goldmann Sachs has been under fierce criticism for its plans to pay multi-billion dollar bonuses for top traders on the back of record pre-tax profits of $12.5b. It says the deal is not a reaction to the political and public storm over its bonus plans and has been planned for over a year. It has also apologised for its part in the boom in cheap credit which sparked the financial crisis.
The Bottom Line:If Mr Cable has his way...
"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more