February 6, 2009

Bank bonuses provoke rancor in Britain

Billions of dollars in bonus checks scheduled by prominent banks have raised hackles in Britain after a year of huge government bailouts.

Lloyds Banking Group, the Royal Bank of Scotland and Barclays risk a public backlash with exorbitant bonus pay, Business Secretary Peter Mandelson said.

Barclays is scheduled to hand out $2.5 billion in bonus checks to Wall Street employees, as stipulated in its purchase agreement with Lehman Brothers, which collapsed last year, The Daily Telegraph reported Friday.

Lloyds, which has accepted $25 billion in a government rescue effort, is scheduled to pay out hundreds of millions in bonus pay.

They have also got to consider how it looks and how it seems when those mistakes and losses have been made, Mandelson said.

Shadow Chancellor George Osborne said, it would be an insult to struggling taxpayers if the government allowed banks we part-own to pay out big cash bonuses.

To increase taxes on people earning $30,000 to pay the bonuses of someone earning $3 million is totally unacceptable, he said.