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Daily Mail
Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S. government for an emergency bail-out. The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday. Each of the firm’s 443 partners is on course to pocket an average Christmas bonus of more than £3million. The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion bail-out.

As Washington pours money into the bank, the cash will immediately be channelled to Goldman’s already well-heeled employees. News of the firm’s largesse will revive the anger over the ‘rewards for failure’ culture endemic in the world of high finance. The same bankers who have brought the global economy to its knees seem to pocketing the same kind of rewards they got during the boom years.

Gordon Brown has vowed to crack down on the culture of greed in the City as part of his £500billion bail-out of the UK banking industry. But that won’t affect the estimated 100 London partners working at Goldman Sachs’s London headquarters. The firm - known as Golden Sacks for the bumper bonuses it pay its top bankers - is expected to cut the payouts by a third this year. However, profits are falling much faster. Earnings have plunged 47 per cent so far this year amid the worst financial crisis since the Great Depression.

This has wiped more than 50 per cent off the company’s market value. The news comes after it was revealed that even bankers working for collapsed Wall Street giant, Lehman Brothers, could receive huge payouts. Its 10,000 U.S. staff are expected to share a £1.5billion bonus pool. The payouts were agreed as part of the rescue takeover of Lehman’s American arm by Barclays last month. The blockbuster handouts caused consternation among London employees of the firm, many of whom have now lost their jobs. Even workers at the nationalised Northern Rock will scoop bonuses worth up to £50million over the next three years.

The extraordinary handouts include more than £400,000 for Rock’s boss, Gary Hoffman, who is likely to become Britain’s best-paid public sector worker. The majority of Northern Rock’s 4,000 workers will receive four separate bonus payments - the first of which will be made next March. Staff will get an extra 10 per cent on top of their basic salary. More

The City watchdog has laid out plans to allow banks to tap the Bank of England for emergency funding without informing the market, in a move which might avoid a repeat of the run on the bank which led to the collapse of Northern Rock. Under the European Union’s market abuse directive, regulated firms have to disclose price sensitive information. However, the Financial Services Authority yesterday said there were potentially situations where banks would be allowed to keep it secret if they had applied to the Bank. The main case for an exception would be if disclosure could panic investors and lead to fears for a bank’s solvency, the regulator said. The FSA laid out a series of proposals in a consultation document. It invited industry groups to respond by September 30.

Critics may say the move comes too late. The Government has been attacked over Northern Rock, which, following a leak, confirmed to the stock market in September that it had appealed to the Bank for emergency funding. The announcement prompted thousands of its customers to queue to withdraw their money, and led to a plunge in the bank’s share price. The Bank was forced to lend billions of pounds to Northern Rock before it was nationalised in February. More