Weak dollar hits City bonuses

Top bankers in the City are losing tens of thousands of pounds in bonuses because of the weak dollar — days after Chancellor Gordon Brown hit them with a massive tax-avoidance clampdown.

The City’s wealthy workers, already facing payouts reckoned to be no higher than last year, could see them fall in real terms because so many work for US investment banks and are paid in dollars.

Investment bankers who typically work at US financial giants such as Goldman Sachs, JP Morgan, Morgan Stanley, Citigroup and CSFB and who might expect their bonuses to top $1million, have seen the value drop over the last year.

At current exchange rates $1 million is worth £515,000 — a year ago it would have given them nearer £600,000.

The banks are trying to minimise the drop by switching the currency in which bonuses are paid or by taking the average price of the dollar over the year rather than the current spot price.