Golden days back for City high-rollers
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Your support makes all the difference.The fat cats of the utilities have been left in the shade by immense rewards for dealers in the City, where bonuses and profit sharing on the Stock Exchange soared almost pounds 100m to a record pounds 315m in the year to June.
The increase, announced by the Exchange yesterday, was on the back of a huge rise in profits among 250 member firms - to pounds 719m - after a spectacular boom year in the stock market.
For the City as a whole, the lucrative rewards of working on the Exchange are believed to be merely the tip of a far larger iceberg. Many hundreds of millions more in bonuses are likely to be paid out across the Square Mile this year.
There is evidence of equally high bonuses for the people who manage pension and insurance funds and unit trusts, for bankers such as corporate financiers who advise on takeovers, and for many other staff. These include foreign exchange dealers and market makers who trade gilt-edged stock.
Estate agents believe that the enormous increase in City bonuses has been one of the factors fuelling a boom in the property market over the past year in some of London's more sought after areas. This happened during the housing boom of the late 1980s, which coincided with the last great stock market bonanza.
The earnings escalation across the City has also been given new impetus during 1996 by the unprecedented movement of high-flyers who switch firms to earn more money.
Deutsche Morgan Grenfell, the investment bank which is owned by Deutsche Bank of Germany, is thought to be one of the most aggressive, offering pay packets of several million pounds to star dealers and analysts. Sometimes, whole teams are poached from other firms.
The race to recruit the top people has led some firms to offer guaranteed bonuses to new staff, regardless of performance in their first few years. But there has been rising anxiety at the Bank of England and among regulators in charge of policing the City, such as the Securities and Investments Board.
Sir Andrew Large, chairman of SIB, warned recently that badly thought out bonus schemes can be dangerous because they encourage City people to take too many risks with other people's money in order to boost their own earnings.
Bankers at Barings were lining up for large bonuses just days before the bank collapsed as a result of the activities of Nick Leeson in Singapore.
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