M&C: Banking Industry - US banks still paid huge bonuses while getting government money

"Business as usual"

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US banks still paid huge bonuses while getting government money

Several banks that received US government assistance paid out billions of dollars in bonuses of 1 million dollar or more per employee, according to a report released Thursday by the New York Attorney General Andrew Cuomo.

Cuomo's office said that even after the sub-prime mortgage crisis started emerging in 2007 and declined into the worst recession since the 1930s, 'compensation and benefits stayed at bull-market levels even though bank performance plummeted.' Two of the first recipients of US government assistance, Citigroup and Merrill Lynch, which suffered losses of more than 27 billion dollars each in 2008, paid out more than 5.3 billion dollars and 3.6 billion dollars respectively, the Cuomo report said.

Even though the payment of these huge bonuses has provoked public outrage among taxpayers angry over the frivolous expenditure of taxpayers' money, not much has been done by the US Government to correct these practices. In Europe some EU member states did put legislation on the books to stop these activities, but overall the result there to curb these activities have also been unsatisfactory.