Banks vulnerable but profits, pay at pre-crisis levels -OECD

[Joanne98]

Source: Reuters

PARIS, May 26 (Reuters) - Banks are making sizeable profits and paying staff as much as in 2007, before the global financial crisis, yet they remain vulnerable, the OECD said on Wednesday.

"Audited accounts for 2009 show that, in the environment of low funding costs and reduced competition following the crisis, major banks earned large amounts of net income from interest margins and investment banking activities," the Paris-based Organisation for Economic Co-operation and Development said.

Major banks "increased personnel compensation expenditure back to 2007 levels, despite reductions in the number of employees and despite high bank income resulting, to a large extent, from public policies," it said in a report on the economic outlook.

"Banks nonetheless remain vulnerable," it added, noting that the price of credit default swaps to protect bank bond investments remained relatively high, due partly to worries about public finances in Dubai, Greece and elsewhere.


Read more: http://www.reuters.com/article/idUSLDE64P0DM20100526