Wall Street Poker

What else can be as rewarding as being a Wall Street banker. Once more will Wall Street banks try to reward their managers with $70 billion in wages and bonus. It will not be difficult to figure out that those bonuses are not for the profits they have generated.

One wonders why they deserve such bonuses, for destroying the financial system over the last year? Most probably not, once banks require financial help from the rescue funds, transparency will be demanded by regulators. For example in the interesting case of Morgan Stanley that managed to have $10.7 billion for bonuses, which would have been enough to buy the entire bank. Also the case of Citygroup was interesting, despite the reduced profits this year salaries and bonuses increased by 4%, totaling at $25.9 billion. At the same time Citigroup has accepted $25 billion from Washington’s rescue funds.

Compared to the German mentality, Josef Ackermann CEO of Deutsche Bank announced that him and the Board of Directors will only take 50% of their remuneration this year. He admitted that Deutsche Bank has also done several mistakes but yet they have not required any help so far and managed to play an important role in rescuing the Hypo Real Estate in Germany with EUR 12 billion of their own funds, nearly 25% of what they needed to survive.

Despite the performance of banks, these figures were retained for bonuses, Goldman Sachs 11.4 billion, JP Morgan 6.53 billion, Merrill Lynch during the last quarter 3.49 billion and Lehman Brothers 6.12 billion despite going bankrupt.

Critics have complained for a long time about the bonus figures, the question is how these managers can be happy taking their bonuses while watching their organization getting into these trouble. Would it not be expected of loyal employees to leave their bonuses to increase liquidity of organizations instead of pushing them into further trouble?