Page last updated at 23:03 GMT, Wednesday, 9 September 2009 00:03 UK

Top US banker criticises bonuses

Lloyd Blankfein
Lloyd Blankfein is one of Wall Street's highest paid bankers

A top US banker has said that public anger about excessive bonuses paid out by financial institutions is both "understandable and appropriate".

Lloyd Blankfein, head of Goldman Sachs, also said that payouts guaranteed over a number of years should be banned.

His own firm was recently criticised for setting aside billions of dollars to be paid out in bonuses.

Many blame excessive bonuses for the short-term risk taking that helped bring about the financial crisis.

Mr Blankfein, one of Wall Street's best paid bankers, said "there is little justification for the payment of outsized discretionary compensation when a financial institution lost money for the year".

Speaking at a banking conference in Frankfurt, he added that "multi-year guaranteed employment contracts should be banned entirely".

Dismay

Bonuses have come under increasing pressure in the fallout from the global economic downturn.

Governments across the world have been discussing ways to ensure that excessive payouts do not become commonplace again.

Last weekend, G20 finance ministers proposed that bonuses should be deferred to reward long-term success rather than short-term risk taking.

Some countries had pushed for formal caps on large payouts.

Earlier on Wednesday, Dutch banks adopted a new code of conduct, which will include capping bonuses and making sure they can be clawed back in the future.

Despite the push for action, there has been widespread dismay that many banks are again paying out generous bonuses.



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