Goldman Sachs announces massive quarterly profits, despite taking billions of dollars in bailout cash last year. Faisal Islam reports on the boom of banking giants regardless of the recession.

“It is a form of compensation which rewards gamblers if they win – but with no loss if they lose,” the Bank of England governor Mervyn King said today denouncing bonuses paid to some banking chiefs and calling for tougher regulation.

Barclays and HSBC announce their half yearly results tomorrow – with bumper bonuses expected despite the recession.

And in the United States, Wall Street’s biggest player Goldman Sachs has just made massive quarterly profits, and paid out some huge bonuses – despite taking billions in government bailout cash last year.

The record bonus announcement has had US voices questioning the influence of so-called “government Sachs”.

It was the rock magazine Rolling Stone that sparked the storm of attention to the Wall Street giant.

Writer Matt Taibbi argued that Goldman is a giant “vampire squid” wrapped around the face of humanity and responsible for no less than six disastrous financial bubbles.

Those words were dismissed as a conspiracy theory at Goldman’s current offices, but that article has spawned other accounts, denied by the company itself, of the panic amongst partners last autumn as a sharp share price fall threatened their financial ruin.

Economics correspondent Faisal Islam reports from New York on the rise of Goldman Sachs.

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