In response, the BBC reports that Goldman has announced that it will not delay it bonus payments (probably increase them at the expense of shareholders to achieve the same after tax bonus for their bankers).
There are two critically important lessons to learn from the row over banker bonuses.
First, the culture of banking has not changed since the financial crisis began on August 9, 2007. Bankers continue to try to maximize their individual pay regardless of the cost to society.
Second and equally importantly, bankers adjust their behavior when market discipline is exerted on them. This point is critically important because it highlights the simple fact that for banks sunshine is the best disinfectant of bad banker behavior.
As your humble blogger has pointed out on numerous occasions, to fundamentally change the culture at banks requires that they disclose on an ongoing basis their current global asset, liability and off-balance sheet exposure details.
With this degree of sunshine into what the bankers are doing, market participants can easily enforce discipline on bad behavior.
By stripping away the veil of opacity, bankers know that there will be a backlash against their activities that are detrimental to society.
From the Guardian,
Sir Mervyn King, governor of the Bank of England, has waded in to the row over bonuses at Goldman Sachs warning it would be "rather clumsy" and "lacking in care" of big banks to attempt to defer bonuses to allow highly paid bankers to pay a lower rate of tax.
Goldman is considering deferring parts of bonuses from 2009, 2010 and 2011 which were due to be handed to bankers in the coming weeks beyond 6 April when the top rate of income tax will fall from 50% to 45%.
Appearing before the Treasury select committee, King told MPs: "I find it a bit depressing that people who earn so much find seem to think that it's even more exciting to adjust the timing of it to get the benefit of the lower tax rate ... knowing this must have an impact on the rest of society, when even now it is the rest of society that is suffering most from the consequences of the financial crisis".
He went on to say that it would be "rather clumsy" and "lacking in care". "In the long run, financial institutions do depend on goodwill from society," said King.