It's all Goldman Sachs' fault says Matt Taibbi

[Peter Lemkin]

The most upsetting of all of the above is:

as the statute of limitations runs out.......

[Peter Lemkin]

How the Goldman Vampire Squid Just Captured Europe
Wednesday, 18 April 2012 08:01 By Ellen Brown, Truthout | News Analysis

The Goldman Sachs coup that failed in America has nearly succeeded in Europe - a permanent, irrevocable, unchallengeable bailout for the banks underwritten by the taxpayers.

In September 2008, Henry Paulson, former CEO of Goldman Sachs, managed to extort a $700 billion bank bailout from Congress. But to pull it off, he had to fall on his knees and threaten the collapse of the entire global financial system and the imposition of martial law; and the bailout was a one-time affair. Paulson's plea for a permanent bailout fund - the Troubled Asset Relief Program or TARP - was opposed by Congress and ultimately rejected.

By December 2011, European Central Bank President Mario Draghi, former vice president of Goldman Sachs Europe, was able to approve a 500 billion euro bailout for European banks without asking anyone's permission. And in January 2012, a permanent rescue funding program called the European Stability Mechanism (ESM) was passed in the dead of night with barely even a mention in the press. The ESM imposes an open-ended debt on EU member governments, putting taxpayers on the hook for whatever the ESM's eurocrat overseers demand.

The bankers' coup has triumphed in Europe seemingly without a fight. The ESM is cheered by euro zone governments, their creditors and "the market" alike, because it means investors will keep buying sovereign debt. All is sacrificed to the demands of the creditors, because where else can the money be had to float the crippling debts of the euro zone governments?

There is another alternative to debt slavery to the banks. But first, a closer look at the nefarious underbelly of the ESM and Goldman's silent takeover of the ECB....

The Dark Side of the ESM

The ESM is a permanent rescue facility slated to replace the temporary European Financial Stability Facility and European Financial Stabilization Mechanism as soon as member states representing 90 percent of the capital commitments have ratified it, something that is expected to happen in July 2012. A December 2011 YouTube video titled "The shocking truth of the pending EU collapse!" originally posted in German, gives such a revealing look at the ESM that it is worth quoting here at length. It states:

The EU is planning a new treaty called the European Stability Mechanism, or ESM: a treaty of debt.... The authorized capital stock shall be 700 billion euros. Question: why 700 billion?... [Probable answer: it simply mimicked the $700 billion the US Congress bought into in 2008.][Article 9]: ",,, ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them ... within seven days of receipt of such demand." ... If the ESM needs money, we have seven days to pay.... But what does "irrevocably and unconditionally" mean? What if we have a new parliament, one that does not want to transfer money to the ESM?...

[Article 10]: "The Board of Governors may decide to change the authorized capital and amend Article 8 ... accordingly." Question: ... 700 billion is just the beginning? The ESM can stock up the fund as much as it wants to, any time it wants to? And we would then be required under Article 9 to irrevocably and unconditionally pay up?

[Article 27, lines 2-3]: "The ESM, its property, funding and assets ... shall enjoy immunity from every form of judicial process.... " Question: So the ESM program can sue us, but we can't challenge it in court?

[Article 27, line 4]: "The property, funding and assets of the ESM shall ... be immune from search, requisition, confiscation, expropriation, or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action." Question: ... [T]his means that neither our governments, nor our legislatures, nor any of our democratic laws have any effect on the ESM organization? That's a pretty powerful treaty!

[Article 30]: "Governors, alternate Governors, Directors, alternate Directors, the Managing Director and staff members shall be immune from legal process with respect to acts performed by them ... and shall enjoy inviolability in respect of their official papers and documents." Question: So anyone involved in the ESM is off the hook? They can't be held accountable for anything? ... The treaty establishes a new intergovernmental organization to which we are required to transfer unlimited assets within seven days if it so requests, an organization that can sue us but is immune from all forms of prosecution and whose managers enjoy the same immunity. There are no independent reviewers and no existing laws apply? Governments cannot take action against it? Europe's national budgets in the hands of one single unelected intergovernmental organization? Is that the future of Europe? Is that the new EU - a Europe devoid of sovereign democracies?

The Goldman Squid Captures the ECB

Last November, without fanfare and barely noticed in the press, former Goldman executive Mario Draghi replaced Jean-Claude Trichet as head of the ECB. Draghi wasted no time doing for the banks what the ECB has refused to do for its member governments - lavish money on them at very cheap rates. French blogger Simon Thorpe reports:

On the 21st of December, the ECB "lent" 489 billion euros to European Banks at the extremely generous rate of just 1% over 3 years. I say "lent," but in reality, they just ran the printing presses. The ECB doesn't have the money to lend. It's Quantitative Easing again.The money was gobbled up virtually instantaneously by a total of 523 banks. It's complete madness. The ECB hopes that the banks will do something useful with it - like lending the money to the Greeks, who are currently paying 18% to the bond markets to get money. But there are absolutely no strings attached. If the banks decide to pay bonuses with the money, that's fine. Or they might just shift all the money to tax havens.

At 18 percent interest, debt doublesin just four years. It is this onerous interest burden - not the debt itself - that is crippling Greece and other debtor nations. Thorpe proposes the obvious solution:

Why not lend the money to the Greek government directly? Or to the Portuguese government, currently having to borrow money at 11.9%? Or the Hungarian government, currently paying 8.53%. Or the Irish government, currently paying 8.51%? Or the Italian government, who are having to pay 7.06%?

The stock objection to that alternative is that Article 123 of the Lisbon Treaty prevents the ECB from lending to governments. But Thorpe reasons:

My understanding is that Article 123 is there to prevent elected governments from abusing Central Banks by ordering them to print money to finance excessive spending. That, we are told, is why the ECB has to be independent from governments. OK. But what we have now is a million times worse. The ECB is now completely in the hands of the banking sector. "We want half a billion of really cheap money!!" they say. OK, no problem. Mario is here to fix that. And no need to consult anyone. By the time the ECB makes the announcement, the money has already disappeared.

At least if the ECB was working under the supervision of elected governments, we would have some influence when we elect those governments. But the bunch that now has their grubby hands on the instruments of power are now totally out of control.

Goldman Sachs and the financial technocrats have taken over the European ship. Democracy has gone out the window, all in the name of keeping the central bank independent from the "abuses" of government. Yet, the government is the people - or it should be. A democratically elected government represents the people. Europeans are being hoodwinked into relinquishing their cherished democracy to a rogue band of financial pirates, and the rest of the world is not far behind.

Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse Article 123 of the Lisbon treaty. Then, the ECB could issue credit directly to its member governments. Alternatively, euro zone governments could re-establish their economic sovereignty by reviving their publicly owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest free. This is not a new idea, but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada.

Today, the issuance of money and credit has become the private right of vampire rentiers, who are using it to squeeze the lifeblood out of economies. This right needs to be returned to sovereign governments. Credit should be a public utility, dispensed and managed for the benefit of the people.

[Jan Klimkowski]

[Article 27, lines 2-3]: "The ESM, its property, funding and assets ... shall enjoy immunity from every form of judicial process.... " Question: So the ESM program can sue us, but we can't challenge it in court?

[Article 27, line 4]: "The property, funding and assets of the ESM shall ... be immune from search, requisition, confiscation, expropriation, or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action."

That could stand as a dictionary definition of a coup d'etat.

[Peter Lemkin]

[Article 27, lines 2-3]: "The ESM, its property, funding and assets ... shall enjoy immunity from every form of judicial process.... " Question: So the ESM program can sue us, but we can't challenge it in court?

[Article 27, line 4]: "The property, funding and assets of the ESM shall ... be immune from search, requisition, confiscation, expropriation, or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action."

That could stand as a dictionary definition of a coup d'etat.

And a silent one at that..with no MSM attention and even little Public or Internet mention/comment/outrage/etc. Time to go Financial Squid Hunting with a harpoon gun with curare-tipped lances! Worldwide. Its like a 1960s Japanese monster horror film...but REAL! "The Giant Vampire Squid That Ate Planet Earth"

[Jan Klimkowski]

The Giant Squid has Long Tentacles....

Whistleblowing is noble.

And dangerous.

Information commissioner investigates HMRC over whistleblower inquiry

HMRC asked to explain how its criminal investigations unit obtained personal details of Osita Mba and his wife

Rajeev Syal

guardian.co.uk, Thursday 7 June 2012 16.13 BST


The information commissioner has launched an inquiry into the way tax investigators obtained and used personal information belonging to the family of a whistleblower who exposed a multimillion-pound "sweetheart" tax deal with Goldman Sachs.

Telephone numbers and the address of Osita Mba, a revenue solicitor, and his wife, Claudia, were passed on to the criminal investigations unit of Her Majesty's Revenue and Customs last year by a manager, according to documents seen by the Guardian.

The day before, Mba had written to two parliamentary committees exposing a tax deal between HMRC and Goldman Sachs that let the bank off from paying £10m in tax.

HMRC's criminal investigations unit can examine tax and telephone records as part of its inquiries. It can also apply to intercept post, emails and telephone calls.

The information commissioner's office has given HMRC 28 days to explain how its criminal investigations unit obtained the numbers and why it is not in breach of the Data Protection Act.

The disclosure has caused concern among MPs on the Commons public accounts committee who say an ongoing criminal inquiry into Mba and his wife is heavy-handed and wrong.

Insiders at HMRC blame Mba's intervention for leading to the retirement of its permanent secretary for tax, Dave Hartnett, who steps down this summer.

Margaret Hodge, the committee's chair, said: "It is most disappointing that HMRC is acting in a way that requires the intervention of the information commissioner. It is essential that genuine whistleblowers such as Mba are properly protected and that the new permanent secretary at HMRC should not try to undermine his vital contribution."

Stephen Barclay, a committee member and the Conservative MP for north-east Cambridgeshire, said: "This is a concerning development. We have taken a very close interest in a whistleblower who we regard as having provided information of public interest to parliament. Clearly we will need to see the details but there is a sense of mistakes being compounded with further mistakes."

Hartnett reached an agreement with Goldman Sachs in December 2010 whereby the bank did not have to pay about £10m interest on tax it had avoided. The bank was found to have employed London-based workers in the British Virgin Islands where they did not have to pay national insurance on bonuses.

Mba, who trained as a barrister in Nigeria and completed his master's degree at Oxford, worked in the personal tax litigation team that dealt with the Goldman Sachs tax issue. He wrote to Amyas Morse, the auditor general of the National Audit Office, in March 2011 outlining his concerns over the deal.

Hartnett discussed the allegation with the Treasury select committee in September and said the Goldman settlement had been reached properly. When asked by Jesse Norman, a Conservative member of the committee, whether he had ever received corporate hospitality from Goldman Sachs, Hartnett responded: "I have been to a supper with Goldman Sachs … I knew nothing of Goldman's tax affairs when I was at that supper. I do not deal with Goldman's tax affairs."

In October, Mba sent a detailed submission to Hodge and Andrew Tyrie, the chairman of the Treasury committee, claiming that Hartnett had misled them over his role in the Goldman Sachs deal.

The public accounts committee subsequently accused Hartnett and senior members of staff of misleading them and hiding behind "client confidentiality" to avoid revealing details of the Goldman tax deal. A judge has been appointed to investigate at least four corporate tax deals signed off by Hartnett.

Mba's identity was revealed in December in evidence released by the public accounts committee. The following day, Hartnett announced his retirement.

Documents sent to the information commissioner's office show that in October last year one of Mba's managers forwarded his and his wife's address and four contact telephone numbers to an officer in HMRC's criminal investigations unit.

Under the Data Protection Act 1998, those who collect and use personal information have to follow rules of good practice. The DPA also gives rights to individuals whose information is collected and used.

Claudia Mba, a charity worker, said she suspected that managers at HMRC were trying to intimidate her and her husband.

"To know that my personal details including my name and phone numbers have been passed on to a criminal investigator is adding insult to injury. The only reason anyone has those details was because my husband provided them for the purposes of a medical emergency contact," she said.

"I don't know why they are passing them round. My husband has raised the question several times, but we haven't received an explanation. I can only assume that I am being dragged in to this as a form of intimidation.

"I no longer feel as though I can talk on the telephone freely; I feel like my privacy has been violated and because I don't know why it has happened, I feel totally insecure and exposed."

Mba is still employed by HMRC but has not been able to return to work. He can enter his office in Whitehall only if he is invited for a meeting, and is still facing disciplinary procedures.

HMRC declined to comment

[Jan Klimkowski]

Via Zero Hedge:


Mario Draghi was a key executive at Goldman at precisely the time when none other than Goldman Sachs was hired to create and facilitate the active hiding of the true extent of the Greek debt problem.

And now we get Dr Strangelovian MAD - only this time it's not nuclear, it's financial.

Just What Is Mario Draghi Hiding? ECB Declines To Respond To Bloomberg FOIA Request On Greek-Goldman Swaps

Submitted by Tyler Durden on 06/14/2012 13:38 -0400



Back in February 2010, in the aftermath of the discovery that none other than Goldman Sachs had facilitated for nearly a decade the masking of the true magnitude of non-Maastricht conforming Greek debt, Zero Hedge first identified the prospectus for a Goldman underwritten swap agreement securitization titled Titlos PLC. We titled the analysis "Is Titlos PLC The Downgrade Catalyst Trigger Which Will Destroy Greece?" because for all intents and purposes it was: at that time a rating agency downgrade of the country would lead to a chain of events which would make billions in assets ineligible for ECB collateral, forcing a massive margin call on the National Bank of Greece, which likely would have precipitated a Greek default there and then.

In retrospect, considering the two years of pain that Greece has already suffered, this may have been the better option as the country would have taken its bitter medicine, and become a second Iceland case study by now, growing at a brisk pace, unencumbered by debt, free from the clutches of the Euro, instead of having its economy collapse by nearly 10% every year without any resolution in sight.

But that is irrelevant for the time being: what is relevant is Titlos itself, and what Bloomberg did after we posted the analysis. It turns out that following in the footsteps of Mark Pittman, Bloomberg sued the ECB under Freedom of Information rules requesting "access to two internal papers drafted for the central bank's six-member Executive Board. They show how Greece used swaps to hide its borrowings, according to a March 3, 2010, note attached to the papers and obtained by Bloomberg News. The first document is entitled "The impact on government deficit and debt from off-market swaps: the Greek case." The second reviews Titlos Plc, a securitization that allowed National Bank of Greece SA, the country's biggest lender, to exchange swaps on Greek government debt for funding from the ECB, the Executive Board said in the cover note. The ECB's response: "The European Central Bank said it can't release files showing how Greece may have used derivatives to hide its borrowings because disclosure could still inflame the crisis threatening the future of the single currency."

Maybe.

But what is far more likely is that the reason why the ECB, headed by none other than former Goldmanite Mario Draghi, is desperate to keep these documents secret is for another reason. A very simple reason:

Mario Draghi - 2002-2005: Vice Chairman and Managing Director at Goldman Sachs International

In other words, Draghi was a key executive at Goldman at precisely the time when none other than Goldman Sachs was hired to create and facilitate the active hiding of the true extent of the Greek debt problem.

In yet other words: could it be that none other than the head of the European Central Bank is refusing to cooperate with a Bloomberg FOIA, something even the US Federal Reserve ultimately succumbed to which led the revelation that the Fed had handed out trillions in secret loans to banks all around the world - and that includes tens of billions in under the table loans to JPM, contrary to Dimon's defense that he did not need the TARP money in Senate yesterday: he did, and much more, but since when is perjury a crime before a kangaroo court of bought politicians:

But this is not about JPM for once. Let's go back to that infernal mollusc which everyone loved to hate in all of 2009 and 2010 until JP Morgan became the world's Fed-backstopped, prop trading pinata, and the response that the ECB did provide to Bloomberg as a reason for not handing out the required information:

Disclosing the files when Bloomberg News first sought them in 2010 would have "fueled negative perceptions about Greece's ability to honor its debt," ECB lawyer Marta Lopez Torres said at a hearing of the European Union's General Court in Luxembourg today. "It's the same now with Spain" which "isn't able to borrow money," she said. "Markets are reacting in very volatile ways. It's affecting the euro economy."

In other words from Mutual Assured Destruction as a means to push through policy propaganda, M.A.D. is now the only option for heads of central banks from being exposed to the world as the very same people who enabled the current financial collapse in the first place?

Now we see...

More from Bloomberg, which explains the reasoning for demanding access to the two abovementioned docs:

These documents "played a role" in shaping policy and "highlighted there were issues" when the ECB undertook a review of its eligibility criteria for collateral in its funding operations, the ECB lawyer told the court.



The cornerstone of the ECB's response to the crisis is to give banks as much money as they needed in return for collateral. In October 2010, the ECB changed the rules on the asset-backed securities it accepted and gave itself more discretionary power to reject collateral if necessary.



"The public has a right to know how EU authorities may have allowed Greece to hide its deficit, which helped trigger Europe's sovereign debt crisis," said Matthew Winkler, editor- in-chief of Bloomberg News. "Greater transparency results in more accountability, and we seek this information to understand how this debt debacle unfolded in an effort to avoid repeating it."



The Greek government didn't originally disclose the swaps, designed to help it comply with the deficit and debt rules it agreed to meet when it joined the euro in 2001. The swaps allowed the country to increase borrowings by 5.3 billion euros, Eurostat, the EU's statistics agency, said in November 2010.



In April 2009 -- seven months before the Greek crisis erupted -- ECB officials spotted "a swap operation in unusual terms," according to the March 2010 document.

And back to Goldman, who in the 2001 onward period was the sole bank provider of shady currency swap transactions:

In the largest derivative transaction disclosed so far, Greece borrowed 2.8 billion euros from Goldman Sachs Group Inc. in 2001 through a derivative that swapped dollar- and yen- denominated debt issued by the nation for euros using a historical exchange rate, a move that generated an implied reduction in total borrowings.



"The Greek authorities had never informed Eurostat about this complex issue, and no opinion on the accounting treatment had been requested," Eurostat, the Luxembourg-based statistics agency, said in a statement. The watchdog had only "general" discussions with financial institutions over its debt and deficit guidelines when the swap was executed in 2001.



"It is possible that Goldman Sachs (GS) asked us for general clarifications," Eurostat said, declining to elaborate further.



Spokesmen for Goldman Sachs in London couldn't immediately comment after the hearing.

How about asking that other Goldman Sachs spokesman, Mario Dragi? Perhaps at the next ECB press conference journalists can finally grow a pair and start asking the really important questions instead of listening to the violins as the European titanic is steadily sinking?

[Magda Hassan]

'No Charges' Against Goldman Sachs, say Feds

Without accountability, says former watchdog, the 'unending parade of megabanks scandals will inevitably continue'

- Common Dreams staff

In a case that exemplifies the degree to which Wall Street's largest financial firms have been shielded from meaningful prosecution for their role in the financial crisis of 2008, the Justice Department late on Thursday announced that no charges would be brought against Goldman Sachs for its role in fueling the sub-prime mortgage debacle.

The Security and Exchange Commission (SEC) also concluded its investigation to the firm without bringing charges.
Goldman Sachs -- which Rolling Stone's Matt Taibbi once famously described as 'a giant vampire squid wrapped around the face of humanity' -- will not face prosecution for selling bundled 'mortgage-backed securities' to clients while simultaneously describing them as "crap" in internal communications.

"Without... accountability, the unending parade of megabanks scandals will inevitably continue." -- Neil Barofsky

As Bloomberg recounts, "The Senate's Permanent Subcommittee on Investigations concluded in April 2011 that Goldman Sachs had peddled mortgage- related securities to its clients while failing to disclose that the firm had bet that those instruments would lose value. The investigation pinned much of the blame for the credit crisis on Wall Street banks that earned billions of dollars by enticing clients to buy the risky bonds."
The proliferation of securitized sub-prime mortgages -- and the manner in which such products were pushed on unknowing consumers -- are widely credited with triggering the collapse of the housing market and sending the financial credit markets into a tailspin in the summer and fall of 2008.
"The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time," the Justice Department said in a statement late on Thursday.
Neil Barofsky, a former watchdog for the U.S. government's financial system bailout in 2008,told Reuters that the announcement was a stark reminder that no individual or institution had been held meaningfully accountable for their role in the financial crisis.
"Without such accountability, the unending parade of megabanks scandals will inevitably continue," said Barofsky, who has been an outspoken critic of the government's response to the financial crisis.
In a brief statement emailed to Reuters, a Goldman Sachs spokesman said: "We are pleased that this matter is behind us."
http://www.commondreams.org/headline/2012/08/10-1

[Peter Lemkin]

'No Charges' Against Goldman Sachs, say Feds

a Goldman Sachs spokesman said: "We are pleased that this matter is behind us."
http://www.commondreams.org/headline/2012/08/10-1

They've got the magic 'get out of jail free' card....in fact a whole deck of them...to be honest, they are holding all the cards in this game, it seems......and are even the dealer and the house...can't loose. WE can't win.

[Jan Klimkowski]

Breaking news: Goldman finds the moral compass it dropped decades ago.....

On second thoughts....

Nah - simply a crude PR stunt whilst their lawyers and tax experts find new, invisisble, tax loopholes.

Goldman Sachs backs down from delayed bonus tax plan

Bank decides not to proceed with scheme which would have allowed top staff to avoid 50% rate, as Mervyn King says bankers seeking to avoid tax is 'depressing'

Jill Treanor

guardian.co.uk, Tuesday 15 January 2013 15.26 GMT

Bank of England's Mervyn King at the Bank for International Settlements press conference in Basel, Switzerland. He has waded into the bank bonus row. Photograph: Patrick Straub/EPA


Goldman Sachs has backed down from proposals to defer bonuses to allow its top bankers to avoid the highest rate of tax in the face of criticism by Sir Mervyn King, governor of the Bank of England.

King waded into the row over bonuses at Goldman Sachs, warning it would be "rather clumsy" and "lacking in care" of big banks to defer bonuses to allow highly paid bankers to pay a lower rate of tax.

His comments at the Treasury select committee were made just as Goldman's compensation committee was meeting ahead of the bank's full-year results on Wednesday shortly after which bonuses will be announced to staff. The Goldman committee decided not to proceed with a plan it had been considering to defer parts of bonuses from 2009, 2010 and 2011 until after 6 April when the top rate of income tax will fall from 50% to 45%.

Appearing before the Treasury select committee, King told MPs: "I find it a bit depressing that people who earn so much seem to think that it's even more exciting to adjust the timing of it to get the benefit of the lower tax rate … knowing this must have an impact on the rest of society, when even now it is the rest of society that is suffering most from the consequences of the financial crisis."

He went on to say that it would be "rather clumsy" and "lacking in care". "In the long run, financial institutions do depend on goodwill from society," said King.

The government has faced criticism for refusing to intervene. Prime minister David Cameron and chancellor George Osborne faced criticism on Monday for refusing to step into the row. The Treasury said: "We do not comment on the tax affairs of individual companies, but we are clear that everyone must pay the tax they owe."

Lord Oakeshott, the former Treasury spokesman for the Liberal Democrats in the Lords, had pointed out that this contrasted with the reaction in June to the tax affairs of comedian Jimmy Carr which the prime minister described as "morally wrong".

The potential for banks to defer the bonuses into the new tax year has added a fresh twist to the annual row over the payouts to bankers. Goldman Sachs is among a handful of US banks due to publish full-year results this week and inform their staff about the size of their bonuses. European banks including UK banks such as bailed-out Royal Bank of Scotland make their announcements in February and March.

Goldman is among the most generous payers in the City. A year ago, it set aside £8bn to pay its staff an average of £238,000 each a figure it is expected to at least match for 2012.

David Hillman, a spokesman for the Robin Hood Tax campaign, which lobbies for a financial transaction tax, welcomed King's comments and urged the government to "get a grip" on the financial sector.

"Good on the governor for slapping the wrists of Goldman Sachs, but why is the government keeping schtum about a tax sleight of hand that will cost them (and us) millions?

"It's only the start of bonus season and already banks are stirring controversy with their disconnect from the rest of society it's time the government got a grip."

[Jan Klimkowski]

Breaking news: Goldman finds the moral compass it dropped decades ago.....

On second thoughts....

Nah - simply a crude PR stunt whilst their lawyers and tax experts find new, invisisble, tax loopholes.

That didn't take long.....

Goldman Sachs pay and bonuses rise to £250,000 each

Bank has set aside $13bn to cover the salaries, bonuses and perks for staff worldwide a rise of more than $30,000 a head on 2011

Jill Treanor
guardian.co.uk, Wednesday 16 January 2013 14.08 GMT
Jump to comments (226)

Goldman Sachs risked stoking the row over City pay on Wednesday by revealing its bankers were paid an average of $400,000 (£250,000) each last year, a rise of more than $30,000 a head on 2011.

Goldman's annual financial results show the bank has set aside $13bn to cover the salaries, bonuses and perks for the 32,400 it employs around the world. Details of the payroll come just a day after the bank was forced to back down from plans to defer bonuses until April so that its highly paid staff could avoid the 50% tax rate.

The size of the bill to pay staff is 6% higher than a year ago. However, the average individual payouts to staff are higher as the number of employees has fallen by 3%.

Staff will find out in the coming days what their bonuses for 2012 will be. Some of them will be expecting to receive millions of pounds .

Pressure from Bank of England governor Sir Mervyn King who said he found it "depressing" that highly paid staff might attempt to avoid the highest rate of income tax forced Goldman to abandon plans to defer part-payment of bonuses from 2009, 2010 and 2011 which were due to be handed to staff this year. The top rate of income tax falls to 45% on 6 April, the start of the new tax year.

"While economic conditions remained challenging for much of last year, the strengths of our business model and client franchise, coupled with our focus on disciplined management, delivered solid performance for our shareholders," said Lloyd Blankfein. Goldman's chairman and chief executive. "The firm's strategic position provides a solid basis on which to grow and generate superior returns."

The bank stressed that its ratio of compensation (pay) to net revenues (income) a closely watched measure of a banks' generosity towards its staff was the second lowest ever at 37.9%, compared with 42.4% for 2011.

Revenues were higher across most of the business with the exception of equities. Investment banking revenues were up 13% to $5bn for 2012, although corporate advisory revenues were flat at $2bn.

The firm, the highest profile of the Wall Street banks, issued its figures just hours before JP Morgan revealed its chief executive Jamie Dimon had taken a 50% cut in his pay to $11.5m from $23m in the wake of the London Whale trading incident, which cost the bank $6bn.

Despite the losses caused by the so-called chief investment office in London, the JP Morgan reported a third consecutive year of record income.

"The firm's results reflected strong underlying performance across virtually all our businesses for the fourth quarter and the full year," said Dimon, whose salary of $1.5m is enhanced by around $10m of share-based payments.

Earlier this week the bank was ordered to make improvements to its control functions by regulators in the US while the Financial Services Authority admitted it had referred the London Whale incident to its enforcement division.

Nobody can believe that this level of salary is justified or justifiable.

There must be something in the water preventing revolution....