Photo: Alwyn Ladell
Barclays Bonuses Rise to Nearly $4 Billion: Where Is the Outrage?
By Mark Karlin
Originally published in Buzzflash.
Barclays may be officially incorporated in the UK, but its branch in the United States is performing “robustly,” according to the bank. That’s one reason, according to Reuters, that Barclays is going to be paying out nearly $4 billion dollars in bonuses for the past year:
A rise in bonuses at the bank could provoke a backlash from politicians and a public angered that banks are not reining in compensation. Excessive pay has been blamed for encouraging risk-taking and contributing to the 2008/2009 financial crisis.
Sky said Barclays is expected to defend the increase in bonuses by pointing to a robust performance by its investment bank in the United States and the threat it will lose its top staff there to its Wall Street rivals.
Amidst an avalanche of Wall Street banks paying fines (instead of being criminally prosecuted by the Department of Justice) for fraud, Barclays is giving out billions of dollars in extra compensation to senior financial staff. Most working people are lucky to get a $50 bonus at the end of the year. But most people don’t work on Wall Street where the corporate culture rewards individuals who encourage pushing at the edge of the legal envelope, as Jamie Dimon has done at JPMorgan Chase.
As noted in a recent BuzzFlash at Truthout commentary, Dimon got rewarded for admitting to multiple JPMorgan Chase fraud and misrepresentation of risk actions (among other regulatory and potentially criminal violations) –involving hundreds of billions of dollars of money — with a 77% raise in his salary to $20 million a year (not including stock options, bonuses, etc.). That is how the JPMorgan Chase board responded to double digit settlements in the billions with the federal government under Dimon’s “leadership.” This is the nod and wink corporate culture incarnate.
Barclays justifies its hard to even fathom $4 billion bonuses in part because of fear its senior executives might be plucked away by a financial firm such as Chase. In short, the financial bank/investment house culture is incestuously corrupt.
Ironically, yesterday Reuters also posted an article that Morgan Stanley (not to be confused with JPMorgan Chase)just reached a $1.25 billion settlement with the feds over, essentially, mortgage fraud. In the Morgan Stanley settlement story, Reuters notes:
Several large U.S. banks have set aside extra money to pay for potential legal costs in the aftermath of JPMorgan Chase & Co’s massive $13 billion settlement with U.S. authorities over bad mortgages.
The FHFA in January said it had recouped nearly $8 billion through settlements with financial institutions it sued in 2011 over allegedly false and misleading statements relating to some $200 billion in mortgage-backed securities sold to Fannie and Freddie.
The housing authority commenced lawsuits against 18 financial institutions in 2011.
Last December, Deutsche Bank said it would pay $1.9 billion to settle claims, while Citigroup paid $250 million.
All these fines for financial fraud, manipulation and misrepresentation of risk (among other illegal behavior) indicate that Wall Street knowingly skirts the law and regulations. The financial firms factor in fines as a small price to pay for billions and billions of dollars in profit from gaming the system.
Does anyone believe that Jamie Dimon or his underlings go into staff meetings and say: “Above all else, I want you to obey the law and SEC regualtions even if it means less profit for our company. Remember, we play by the rules, even if it results in smaller bonuses and lower share prices.” Does anyone really believe that is the corporate culture at JP Morgan Chase or Barclays or Morgan Stanley or Bank of America, or any of the banks too big to fail? If you do, I got a bridge to sell you.
Wall Street bonuses are basically money redistributed upward to the 1% in large part through financial chicanery. They don’t generate jobs to any great extent; they just, to a great degree, suck up the income of the working class and turn it into profitable debt, make money off of scheming with mortgages, force even some investors to lose money by misrepresenting risk, and even fix market trading.
It’s bonuses coming directly from a crime scene as their source.