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IMF chief "appalled" by the return of large banking bonuses

Text by NEWS WIRES

Latest update : 2009-07-29

Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, told FRANCE 24 that he was "appalled" to see large bonus provisions being set aside at banks, which he warned could lead to new "dramas" in the financial sector.

AFP - The return of the big bonus culture for top banking executives will trigger new "dramas" in the financial sector if tougher regulation is not applied, IMF chief Dominique Strauss-Kahn said Wednesday.

"I am appalled at what I see," the Fund's managing director told France 24 television in reference to multi-billion-dollar bonus provisions set aside at the likes of Wall Street's Goldman Sachs and top London firms.

"The fact that... one of the causes of (the crisis) -- the lure of profit, this easy money, the taking of huge risks to make money -- is returning so quickly... that appalls me," Strauss-Kahn said.

He also expressed his sadness at a failure by leaders to "put in place regulations preventing this, stopping a small group of men and women drawn to profit from dragging the entire world economy into catastrophe."

While Strauss-Kahn said it was "not the job of the IMF" to press for such regulation, he said the bonus culture "is something that has created dramas (for the financial sector) and which will create more again if we don't put the brakes on."

Goldman Sachs and JP Morgan have reported record profits for the first half of the year, while Europe's biggest bank, Santander, on Wednesday reported the second highest quarterly profit in its history.

Date created : 2009-07-29