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August 27, 2013

Five Years After TARP, Misgivings on Bonuses

“‘There was such a total lack of awareness from the firms that paid big bonuses during this extraordinary time.’

That is what Henry M. Paulson Jr., former Treasury secretary, said last week. We were discussing the 2008 financial crisis in light of the approaching five-year anniversary of those white-knuckled days, when Lehman Brothers collapsed and the government stepped in to bail out the American International Group and then the banking system.

Mr. Paulson’s comments about the outsize bank bonuses paid after the bailouts might sound de rigueur given all the frustration that has already been expressed by others. But Mr. Paulson had never been so emphatic about the bonuses in public.

Five years on, Mr. Paulson, assessing the success of a bailout program that clearly helped stabilize the economy, said that the bonuses that the banks paid after the bailouts — a record $140 billion in 2009 — were a primary reason for the public outrage over the program he worked so hard to persuade Congress to pass and the country to support.”

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Read full New York Times article here

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