By: Matthew Arndt, CFA, CPA, CFP | June 24, 2009 | The Politicians, The Regulators, Wall Street Ethics

In a story that has gone for the most part unnoticed, Citigroup and Bank of America, both of whom have received massive infusions of taxpayer money in the past year, are now scheming to get around the recent limits being placed on annual bonuses.  Both are expected to raise base salaries for investment bankers and executives to compensate for the limits placed on annual bonuses.  In other words, the very same people responsible for all the losses will receive pay raises.

In what should be an absolutely disgraceful assertion, banks have suggested that “high-performing” bankers would defect if compensation levels deteriorate.  That conjures up a few questions to say the least.  First, have there been any “high-performing” bankers lately?  Second, don’t these buffoons understand that had the government allowed them to go under, they would not be receiving anything but a big donut for pay?

What has gone on in the banking industry is shameful.  It is tantamount to your fiscally irresponsible neighbor placing a brainless losing bet on the Roulette wheel, ending up in dire financial straits, then coming to you to borrow a huge amount of money while telling you he demands there be no strings attached.  You (if you’re foolish enough) lend him the money only to find out instead of using the funds to repair his situation and make amends, he has went on a Caribbean vacation, gambling included, at your expense.

In the latest round of industry reform we have every right to ask for accountability.  We are the ones that kept these floundering banks afloat with our tax dollars.  It is not the US taxpayer’s job to enrich investment bankers.  How dare they try to marginalize us and say we should have no input into these matters? Distinguished people like Nobel laureate Joseph Stiglitz and Nouriel Roubini should be involved in the reform process, and investor advocacy groups ought to be calling most of the shots.  Not the slow-thinking irresponsible banking executives who got us into this mess.