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Eight major banks which were at the front of the line for government bailouts have already set aside $117.6 billion this year to pay employees, almost as much as they paid in all of 2008, a Reuters analysis has found.
If the banks continued that pace, they would far surpass what they paid in 2008 though fall short of the watershed paydays of 2007, when the financial sector was still booming, the analysis found.
The pay offered by top banks reflects the dramatic rebound at some of them, but also shows that industry conditions have not quite been restored to 2007 levels —before the collapse of Lehman Brothers and the fire sale of Bear Stearns, industry analysts said.
Critics say it is also a sign that banks have learned few lessons from last year's financial crisis, which has been widely blamed on Wall Street's pursuit of short-term profits that pumped up pay.
"Banks don't appear to have learned much, at least on the compensation side, from what we've been through," said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University. "Don't tell me you are bringing me back to the good old days of yesterday. Getting back to pre-Bear Stearns or Lehman is not fixing it. It is setting us up for another fall."
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