US Banks still Barely Recovering

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Even if there’s a slight recovery for US banks, they still remain in tight straights – especially the smaller ones – experts say. A clear breakwater for the large financial institutions of the nation came as a flood of financial results were reported for the period April-June but regional banks are still bleeding red.

There were four banks that raised enormous profits for the past three months.

Citigroup raised 4.3 billion, Wells Fargo and Bank of America raised 3.2 billion, and JPMorgan Chase raised 2.7 billion. But an analyst from Meeschaert New York, Cesare de Novellis, said “These results did not come from commercial lending, the one crucial for economic activity. Instead it came from the side of investment bank, on a renewed vigor of bond markets and a powerful rally of equity markets.”

In fact, Golden Sachs, an investment bank that has limited general public activities, saw their quarterly profit jump to 3.4 billion dollars, which is a 65% increase compared to a year ago. But all these strong results revived the traders’ bonuses debate which seems to be rising again after laying low for the past few months. International Monetary Fund’s managing director, Dominique Strauss-Kahn, said “I was appalled by the big bonus culture that’s responsible in part for the crisis in the financial system.”

In a recent report of the state attorney general’s office in New York, the federal government bailed Citigroup out with 45 billion dollars from taxpayer’s money yet they paid 5.33 billion in bonuses. Another example is Merrill Lynch, which agreed towards Bank of America’s government-secured takeover and escaped bankruptcy only to pay 3.6 billion dollars in bonuses to its traders.

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US Banks still Barely Recovering

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