Barclays and HSBC both announced better than expected rise in profits, boosted by performance in their investment arms.
With more banks due to announce similar results, this return to high profits is likely to spark the debate over city bonuses. With bankers at Barclay’s investments banks seeing their pay and bonuses double, up to nearly £250,000 this year, just months after it received £130bn from the taxpayers after the financial system’s near-collapse.
John McFall, chairman of the Treasury Committee of MPs, said that banks which doled out bumper bonuses were failing in their social responsibility
The Centre for Economics and Business Research is forecasting that £4 billion will be paid out in bonuses across all banks this year.
The Governor of the Bank of England, Mervyn King, called for tougher regulation on bonuses, and was cited saying that some bonuses would be “absolutely astronomical”.
“It is a form of compensation which rewards gamblers if they win – but with no loss if they lose,” he wrote”, he added.
Treasury minister Lord Myners called for the publication of the highest earning bankers’ identity. In the current system, only board-level pay-outs are being disclosed. Lord Myners stated that last year, over 200 RBS bankers were awarded bonuses exceeding that of former CEO Sir Fred Goodwin.
Paul Gray is an entrepreneur and digital publisher who creates online publications focused on solving problems, delivering news, and providing platforms for informed comment and debate. He is associated with HRZone and has built businesses in the HR and professional publishing sector. His work emphasizes creating industry-specific content platforms.
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