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THURSDAY, NOVEMBER 26, 2009
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21

TARP-Funded Banks Kept Awarding Bonuses

Firms paid more than they made: Cuomo

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(Newser) – The financial crisis and government bailouts did little to change Wall Street’s executive compensation habits, New York's attorney general says. All nine banks given assistance by TARP paid out bonuses in 2008—well before any paid back government loans, according to a survey ordered by Andrew Cuomo. Goldman Sachs, Morgan Stanley, and JPMorgan Chase actually paid more in bonuses than the firms made for the year, the Wall Street Journal reports.

The report, "No Rhyme or Reason: The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture," says Goldman, for example, paid $4.8 billion in bonuses in 2008 but earned only $2.3 billion. The firm received $10 billion in TARP funds. Citigroup's yearly losses topped $27 billion, but the bank nonetheless paid out $5.3 billion in bonuses, greased by $45 billion in bailout money.

In this Feb. 11, 2009 file photo, NY Attorney General Andrew Cuomo announces the the arrest of twelve individuals and the shutting down of a Bronx-based criminal enterprise in a vehicle theft ring.
In this Feb. 11, 2009 file photo, NY Attorney General Andrew Cuomo announces the the arrest of twelve individuals and the shutting down of a Bronx-based criminal enterprise in a vehicle theft ring.   (AP Photo/Louis Lanzano, File)
In this June 12, 2007 file photo, the building on Broad Street in New York's Financial District that houses brokerage firm Goldman Sachs, is shown.
In this June 12, 2007 file photo, the building on Broad Street in New York's Financial District that houses brokerage firm Goldman Sachs, is shown.   (AP Photo/Richard Drew, file)
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When the subprime crisis emerged in 2007, followed by the current recession, compensation and benefits stayed at bull-market levels even though bank performance plummeted.
- Andrew Cuomo, NY Attorney General

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21 comments
VIEWING:
 
godawgs
Jul 30, 09 1:03 PM CDT
still no mention of how Freddie and Fannie paid their bonuses as well. Reply
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+4
IN RESPONSE:
Bryanw55
Jul 30, 09 7:36 PM CDT
Fanny and Freddy did not have near the default percentage on their low income loans that the commercial banks did. The commercial banks lobbied heavily for looser and looser standards. When they got them, they loaned to anybody, wrapped the loans up, called them AAA+, got rid of them, then bet 40 times more that the loans would fail in a totally unregulated environment. Those bets being called is what hammered the economy far worse that a plain old mortgage crisis would have and either nearly or will cause a world financial meltdown.
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+3
IN RESPONSE:
Bryanw55
Jul 30, 09 7:53 PM CDT
The above does not mean that I think the Freddy and Fanny Execs should have taken bonus though.
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+1
Jayster999
Jul 30, 09 1:21 PM CDT
The great American banking swindle. The banksters have been stealing the wealth of our country since the inception of the federal reserve act. This "bailout" was nothing more than a wholesale fleecing of the American taxpayer by the banksters and their puppet politicians. Reply
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+7
IN RESPONSE:
IndependentThinker
Jul 31, 09 3:16 PM CDT
The game was setup by Clinton's congress, pitched by GW Bush and slammed home by B Obama, thank you Washington, thank you elected officials.
Vote up! Vote down!
+2

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