Translated material
Wall Street forgot about the crisis
The largest US companies will pay record bonuses at the end of the year
Despite the fierce fight against bonuses, in which the authorities of most countries have become involved, the largest financial companies in the United States can pay record bonuses to their employees by the end of this year - about $140 billion. The bankers can only be justified by the growing income of the companies. Thus, the profit of the second largest US bank JP Morgan Chase & Co in the third quarter exceeded all expectations, increasing almost seven times, to $3.6 billion.Yesterday JP Morgan published a financial report, which states that in the third quarter its net profit amounted to $3.59 billion compared to $527 million a year earlier, and net revenue increased by 80%, to $26.62 billion (in July-- September 2008 - 14.74 billion). The bank's net profit for the nine months of 2009 increased by 72% and amounted to $8.45 billion against 4.9 billion for the same period a year earlier, and net revenue increased by 54% to $77.27 billion (for nine months of 2008 it amounted to $50.03 billion).
According to a June study by the British magazine The Banker, JP Morgan topped the list of the strongest credit institutions in 2008. It took first place in the list of the most stable banks, rising from fourth place. This result was facilitated by the takeover of Bear Stearns and Washington Mutual banks, which were on the verge of bankruptcy during the most difficult moments of the crisis. This even then made many experts believe that JP Morgan was one of the most successful participants in the banking market. In addition, the bank has already returned to the state the funds it received under the Troubled Asset Relief Program (TARP).
Following the publication of the report, the bank's securities jumped 3.7% in preliminary trading. "While we are seeing some early signs of stabilization in the consumer lending sector, there is no confidence that this trend will continue," the bank's chief executive Jamie Dimon said yesterday.
"I still believe that JP Morgan will be the first big bank to start paying dividends to its shareholders," Anton Schutz, president of Mendon Capital, told Reuters. According to The Wall Street Journal, the largest American banks and investment companies may pay about $140 billion in bonuses by the end of this year. The newspaper analyzed the financial statements of 23 largest American banks, hedge funds, management companies, investment funds, as well as commodity and raw materials companies. brokers. Among them are JP Morgan, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, Ameritrade, NYSE Euronext, etc. Employees of these firms will earn 20% more than last year, when payments amounted to $117 billion. Moreover, they will be beaten the record figure recorded in 2007 was $130 billion.
The return of wages to pre-crisis levels can be justified by the financial success of companies. The total revenue of 23 giants in 2009 could amount to about $437 billion, which is 27% more than in 2007. According to The Wall Street Journal, the banks Goldman Sachs and Morgan Stanley spend more than others on employee remuneration - about 50% of revenue. At the same time, bank employees and other employees of retail departments earn less than traders, WSJ emphasizes. “Huge bonuses were one of the reasons for the financial crisis, despite this, at present, almost nothing has changed,” the publication quotes the words of corporate governance expert and professor at the University of Denver Robert Brown.
However, bankers believe that high salaries are the engine of the financial market. “Cutting the salaries of our employees is the easiest way to undermine the company’s activities. I don’t think anyone is interested in the largest corporations losing their profits because of this,” says Goldman Sachs spokesman Lucas van Praag.
Even people close to the US Treasury Department were accused of excessive earnings yesterday. Bloomberg reports that some of Treasury Secretary Timothy Geithner's closest aides have earned millions of dollars working with Goldman Sachs, Citigroup and other major companies. Bill Clinton's former economic adviser Gene Sperling earned $888,000 at Goldman Sachs last year. Another assistant, Lee Sachs, received more than $3 million in various payments from the New York hedge fund Mariner Investment Group. According to the agency, Messrs. Sperling and Sachs helped oversee the TARP program, developed a new approach to paying executive bonuses and improved rules for financial markets. However, they were not approved for their positions in the Senate and were not subject to any public control.