October 21, 2009

Britain's finance sector is set to pay out six billion pounds in bonuses this year as banks return to profit less than a year after the near collapse of the financial system, according to researchers.The Centre for Economics and Business Research (CEBR) predicted a 50 percent leap in bonuses compared to January, from four billion to six billion pounds (10 billion dollars, 6.6 billion euros)."Banks profits have risen very sharply this year, reflecting a lack of competition in the market," said CEBR chief executive Douglas McWilliams.

"It is not surprising that the increase in bonuses has matched these higher levels of profitability."The CEBR said however that it would still be at least five years before bonuses in the financial sector return to their levels before the crisis erupted last year. It said 10.2 billion pounds were paid out in 2007.The US banking industry posted landmark profits last week, prompting concern that banks will return to paying staff huge bonuses, a practice blamed for encouraging excessive risk-taking that exacerbated the global downturn.