The banking bonus debate has been reopened with the news that France’s biggest bank, BNP Paribas, is paying bonuses totalling one billion euros to workers in its investment banking division.The information was contained in the latest quarterly earnings which showed a 1.6 billion euro profit. The one billion in bonuses works out at an average of 59,000 euros for each of the 17,000 investment banking division employees. BNP has received 5.1 billion euros in state bailout money and in April the French Government became the largest shareholder with a 17 percent stake. A government spokesman said it is up to the central bank – Bank of France – to decide if the bonuses follow the rules. The bank’s boss, Baudoin Prot, said it had strictly adhered to the bonus guidelines laid down by the G20. Economist Nicolas Bouzou commented: “Traders’ bonuses, which were common place before the crisis, still exist today as the situation on financial markets improves. It seems we’ll have to wait a little longer for real change and for the G20 recommendations to be implemented by the banks.” Across the Atlantic, the bonus argument rumbles on with adverse comments in the media about the return of big payments as banks which just recently were begging for government help start making record profits. At Goldman Sachs the chief executive has reportedly told his employees to avoid flashing their cash and making conspicuous purchases.
BNP Paribas defends big bonuses