President Obama hits out at bank bonuses

Nick Goodway
Friday 04 July 2014 00:31
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President Barack Obama has warned US banks that the bonus-driven culture of Wall Street is still a risk to the stability of the financial system.

President Obama told radio service American Public Media that reform of banks' incentive systems was an "unfinished piece of business".

He added: "Right now, if you are in one of the big banks, you can generate a huge amount of bonuses by making some big bets on the trading desk. But if you make a really bad bet, a lot of times you've already banked all your bonuses."

The average Wall Street bonus last year was $164,000 (£95,600) – the highest since the financial crisis of 2008. The total bonus pool rose by 15 per cent to $26.7bn. Mr Obama said recent reforms had provided some protection for taxpayers but not enough. "That's going to require some further reforms," he said.

The President added that he had told his economic team at the White House "to continue to see how we can rebalance the economy sensibly, so we have a banking system doing what it is supposed to be doing to grow the real economy".

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