Banks have taken a lot of public heat over the bonuses they pay to their employees. Before the financial crisis, the banks used bonuses to keep their most profitable staff. Now they argue that they have to keep paying to keep them on board, despite the fact that the banks have no money and are receiving public assistance.
The French, British and German governments have officially called for an end or a cap on bank bonuses, at least for those companies receiving government aid. Barack Obama attacked the payment of over 18 billion dollars in NYC bank bonuses in January as 'outrageous', given the role the bonuses played in the financial crisis and the aid these institutions have received from the US government.
In the UK, the fight has been most interesting, as the government of Gordon Brown has flip-flopped on the issue of bonuses. First, there was talk of preventing state-owned banks from paying out bonuses. Then came Gordon Brown's suggestions for some sort of clawback of bonuses if things 'went wrong'. At the G20 Summit this last week, the UK instead joined the US in rejecting regulations on bank bonuses. That has apparently encouraged bankers to take action of their own. London bankers are now suing for bonuses they say they are their right. And it's only the beginning.
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