After announcing intentions last week to return $10 billion in TARP money to Uncle Sam, Goldman Sachs has since hinted at record bonuses for employees this year. According to the Guardian, Goldman will set aside $600 million in first-quarter profits to fund bonuses.
Says the Guardian:
These banks are intermediaries in the bond markets where governments and companies are raising billions of pounds of new money. There is also a lack of competition that means they can charge huge sums for doing business.
I expect that many readers at TheCanned.com will find this news nausiating. I would personally rather see the i-banks earn their way out of this rather than earn receive more money from the government. This lack of competition will be short-lived, as will the windfall profits from stimulus-bound sovereign debt isuance.
It’s tough to stomache, but it may just be another step in the right direction.
