Randomly Noted

Andrew Cuomo, New York’s Attorney General, has outed a clutch of dysfunctional banks that took taxpayer bailout money only to bestow generous bonuses on their employees last year. “At many banks … compensation and benefits steadily increased during the bull-market years between 2003 and 2006,” Cuomo’s office said. “However, when the subprime crisis emerged in 2007, followed by the current recession, compensation and benefits stayed at bull-market levels even though bank performance plummeted.” As Captain Renault of the film “Casablanca” said: “I’m shocked, shocked to find that gambling is going on in here!” Renault, of course, knew exactly what was going on in wartime Morocco. Likewise, We the People threw TARP money at some of the world’s most blatant gamblers – financial institutions wagering clients’ and shareholders’ money. Surely we don’t now expect them to get religion and start behaving like so many chastened Puritans? Wall Street’s boom era culture is alive and well. After Cuomo’s report came out, “employees of major Wall Street companies were comparing notes about which companies paid the greatest number of large bonuses,” DJN reports. Who can blame them? Don’t we all want to know what the guy sitting next to us earns? If you have any doubts that banks and bankers are back to their old tricks, consider Marshall Eckblad and Brett Philbin’s latest DJN story, “Some Banks Send FDIC Bills to Business Customers.” Marshall and Brett note that the Federal Deposit Insurance Corp. “decided to charge the nation’s banks $5.6 billion to re-stock” its deposit insurance fund amid the banking crisis.  The idea being that the banking industry should clean up its own mess. But of course the banks don’t really intend to do that. “In many cases, large banks are passing the cost of that emergency FDIC assessment along to some of their business customers.” Shocked yet? Nope. It’s worth noting that business clients already have to pay ongoing insurance premiums based on deposits. “Those rates had fallen near zero in recent years, but have more recently soared to offset current and projected losses from failed banks,” Marshall and Brett report. If you’re a business owner, you’re feeling snookered right now. But not shocked.